Mexican Peso Marks Third Straight Gain Amid Weaker Dollar
U.S. Treasury Secretary Scott Bessent announced he will meet with his Chinese counterpart next week in Stockholm.
Quick overview
- Traders are closely monitoring U.S. trade negotiations as the tariff deadline approaches.
- The Mexican peso strengthened against the U.S. dollar, closing at 18.6383 pesos per dollar.
- The dollar's decline is attributed to fading confidence in U.S. economic exceptionalism.
- Stronger-than-expected retail sales data in Mexico contributed to the peso's gains.
Traders remain alert for updates on U.S. trade negotiations with key partners ahead of the looming tariff deadline.
The Mexican peso strengthened against the U.S. dollar on Tuesday, buoyed by a weaker greenback as markets awaited developments in U.S. trade talks with several of its international partners.
The exchange rate closed the session at 18.6383 pesos per dollar, according to official data from the Bank of Mexico (Banxico), marking a gain of 2.34 centavos or 0.13% from Monday’s close of 18.6617.
During the day, the dollar traded within a range of 18.7008 to 18.5868 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the dollar’s strength against a basket of six major currencies, dropped 0.48% to 97.38 points.
With Tuesday’s advance, the peso has now logged three consecutive days of gains. Since last Thursday’s close of 18.7569, the currency has recovered 11.86 centavos, or 0.63%, as traders grow more cautious about the outlook for the U.S. economy.
Eyes on Tariff Deadline
U.S. Treasury Secretary Scott Bessent announced he will meet with his Chinese counterpart next week in Stockholm, Sweden, to discuss what is likely to be an extension of the August 1 deadline aimed at avoiding the imposition of new tariffs.
“As confidence in U.S. exceptionalism fades, the dollar has depreciated more than we expected. This has strengthened major currencies against the greenback, including the Mexican peso,” said analysts.
Local Economic Data in Focus
Investors also responded to stronger-than-expected local economic data. Mexico’s retail sales rose more than forecast in May, lending support to the peso, despite INEGI’s Global Indicator of Economic Activity (IGAE) showing a modest 0.4% year-over-year increase that same month.
“Today’s gains were supported by upbeat retail sales data, even though IGAE growth came in weak,” said one analyst. Traders are now turning their attention to tomorrow’s release of inflation data for the first half of July.
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