Mexican Peso Strengthens as Markets Brace for the Fed’s Announcement.
While no change is expected in the federal funds rate, markets will be closely watching the tone from Chair Powell.
Quick overview
- The Mexican peso gained slightly against the U.S. dollar, closing at 19.6598 pesos per dollar, a 0.05% appreciation.
- Market sentiment was influenced by comments from U.S. Treasury Secretary Scott Bessent regarding potential trade agreements.
- Traders are focused on the Federal Reserve's upcoming policy announcement, with no rate changes expected but close attention to the messaging.
- Analysts predict the peso will trade between 19.57 and 19.75 in the coming days amid a quiet domestic economic calendar.
The Mexican peso posted a slight gain against the U.S. dollar on Tuesday, as investors remained cautious amid developments around U.S. tariffs and looked ahead to the Federal Reserve’s monetary policy decision due tomorrow.
The exchange rate closed the session at 19.6598 pesos per dollar, compared to the previous official close of 19.6694, according to data from the Bank of Mexico (Banxico). The move represented a marginal appreciation of 0.05% for the peso—less than one cent.
During the session, the dollar traded within a range of 19.7811 at the high and 19.6207 at the low. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, slipped 0.52% to 99.28 points.
Positive Momentum
The peso had started the day under slight pressure but rebounded following comments from U.S. Treasury Secretary Scott Bessent, who stated—without providing details—that the Trump administration could announce agreements with some of its key trading partners later this week.
President Donald Trump also made headlines, saying that China is seeking a trade agreement to bring an end to the steep tariffs imposed on its exports. He added that the leaders of the world’s two largest economies would meet “at the right time.”
Earlier, markets had reacted negatively to media reports suggesting the European Union could retaliate if a satisfactory deal isn’t reached. Additionally, Trump announced plans to impose tariffs on pharmaceutical products, without specifying a timeline.
Focus Turns to the Fed
Traders are now focused on Wednesday’s policy announcement from the Federal Reserve. While no change is expected in the federal funds rate, markets will be closely watching the tone and messaging from Fed Chair Jerome Powell, as well as the content of the official statement.
Analysts say any reference to the impact of tariffs on economic growth, inflation, or employment will be closely scrutinized. Comments regarding the central bank’s independence will also be notable, following recent criticism from President Trump.
In the coming days, the peso is expected to trade within a range of 19.57 to 19.75, amid a downward correction in the exchange rate and a quiet domestic economic calendar—though global attention remains fixed on the Fed’s upcoming policy meeting.
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