Mexican Peso Strengthens Amid Optimism Over Court Setback to Trump Tariffs
The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.56%.
Quick overview
- The Mexican peso appreciated against the U.S. dollar, closing at 19.3116 pesos per dollar, a gain of 0.53%.
- Market optimism increased following a U.S. court ruling that overturned many of Trump's reciprocal tariffs.
- The U.S. Dollar Index fell by 0.56% as traders reacted to improved U.S. GDP data and Banxico's interest rate cut.
- Analysts caution that while the court's decision is positive, Trump may continue to advocate for tariff implementation.
The Mexican peso appreciated against the U.S. dollar on Thursday, buoyed by a more optimistic market environment following a U.S. court ruling that many of former President Donald Trump’s reciprocal tariffs must be overturned.
The exchange rate closed the day at 19.3116 pesos per dollar, compared to 19.4145 in the previous session, according to official data from the Bank of Mexico (Banxico). This represented a gain of 10.29 centavos for the peso, or 0.53%.
During the session, the dollar traded in a range between a high of 19.4189 pesos and a low of 19.2925. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.56% to 99.34 points.
Market sentiment improved after the U.S. Court of International Trade ruled on Wednesday that Trump had overstepped his authority in imposing “reciprocal” tariffs and ordered the cancellation of all contested tariff orders.
“In simple terms, the court’s decision means there won’t be tariffs, which is good for the economy and markets,” said one analyst. “However, it’s news to be taken with caution, as Trump is likely to keep pushing for their implementation.”
Additional optimism came from updated U.S. GDP data showing the economy contracted less than previously estimated. In the first quarter, GDP shrank by 0.2% on a seasonally adjusted basis, better than the initial estimate of a 0.3% contraction and below market expectations of a 0.4% decline.
On the domestic front, traders digested minutes from Banxico’s latest policy meeting, in which the central bank cut its benchmark interest rate by 50 basis points to 8.50%. The governing board noted that inflation is moving toward the target and that the balance of risks remains tilted to the downside.
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