Mexican Peso Weakens Against Dollar as Markets Monitor Trump’s Fiscal Plan
On the domestic front, investors are awaiting key economic releases scheduled for tomorrow, including Mexico’s GDP and inflation figures.
Quick overview
- The Mexican peso weakened against the U.S. dollar, closing at 19.3716 pesos per dollar after a three-day winning streak.
- The U.S. Dollar Index fell 0.43% to 99.60 points amid ongoing market caution regarding U.S. fiscal policy.
- Analysts predict potential further dollar weakness, with the peso possibly strengthening to levels not seen since August.
- Investors are awaiting key economic data from Mexico, including GDP and inflation figures, following a recent interest rate cut by Banxico.
The Mexican peso weakened against the U.S. dollar in midweek trading, snapping a three-day winning streak that had boosted the currency by over 1% and pushed it to its strongest level since mid-October.
The exchange rate closed at 19.3716 pesos per dollar, according to official data from the Bank of Mexico (Banxico), compared to 19.2757 in the previous session. This represented a loss of 9.59 centavos, or 0.50%, for the peso.
During the session, the dollar traded between a high of 19.3944 and a low of 19.2593 pesos. Meanwhile, the U.S. Dollar Index (DXY)—which tracks the greenback against a basket of six major currencies—fell 0.43% to 99.60 points by the end of the day.
U.S. Fiscal Uncertainty Weighs on Markets
Markets remain cautious as traders await clarity on U.S. trade relations and the legislative path of President Donald Trump’s controversial fiscal reform bill. All eyes are on the proposed legislation, as its final version will play a key role in determining the scale of the U.S. fiscal deficit in the coming years.
Some analysts estimate Trump’s plan could add between $3 trillion and $5 trillion to the current U.S. debt, which stands at $36.2 trillion. Moody’s recently downgraded the U.S. credit rating, citing unsustainable debt levels—an event that has triggered capital outflows into emerging markets.
Trading desks this week have highlighted a short-term range between 19.25 and 19.45 pesos per dollar. Several brokerages anticipate further dollar weakness, and if the current uncertainty persists, the peso could strengthen toward levels of 19.00 or even 18.50—figures not seen since August.
Eyes on Mexican Economic Data
On the domestic front, investors are awaiting key economic releases scheduled for tomorrow, including Mexico’s GDP and inflation figures. These reports follow Banxico’s recent decision to cut its benchmark interest rate by half a percentage point, with officials signaling openness to further easing depending on future data.
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