Mexican Peso Loses 1% Against the Dollar Amid Volatility

The Mexican peso weakened once again against the U.S. dollar on Monday, as markets remained rattled by renewed concerns over a potential global recession.

These fears intensified after it was confirmed that U.S. tariffs would not be suspended, and President Donald Trump issued fresh threats toward China.

The peso lost ground during a volatile session, pressured by the prospect of slower global growth following last week’s tariff announcements by the U.S. government.

The exchange rate closed the session at 20.6889 pesos per dollar. Compared to Friday’s official closing rate of 20.4650, according to data from the Bank of Mexico (Banxico), the peso depreciated by 22.39 centavos — a drop of 1.09%.

During the session, the dollar traded in a wide range, reaching a high of 20.8098 and a low of 20.4814 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.47% to 103.50.

The peso’s negative reaction reflects Mexico’s close economic ties with the United States, raising concerns that any slowdown in the U.S. economy could spill over and adversely impact Mexico.

Volatile Trading Session

Markets were particularly volatile earlier in the day, following media reports citing White House economic adviser Kevin Hassett, who suggested President Trump might consider pausing tariffs for 90 days.

However, the White House later denied Hassett’s statement, and tensions escalated further when Trump threatened to impose additional tariffs on China unless it rolled back the retaliatory measures it announced last week.

Although Mexico is not included in Trump’s broad-based tariffs, it still faces levies on aluminum, steel, and automobiles — issues it is actively negotiating. President Claudia Sheinbaum is seeking to avoid reciprocal tariffs and continues efforts to reach a deal with the Trump administration.

Technical Standpoint

The daily trading range for the peso was notably wide. The session high of 20.80 pesos — a level not seen since early March — served as a key medium-term resistance point. Analysts are now watching a support-resistance range between 20.40 and 20.80 pesos per dollar.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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