Mexican Peso Rises Versus Dollar as Trump Targets Fed Again

The Fed said Cook intends to challenge her dismissal in court and seek a judicial ruling upholding her mandate.

Written by: Ignacio Teson • Tuesday, August 26, 2025 • 1 min read

• Last updated: Tuesday, August 26, 2025

Quick overview

The Mexican peso strengthened slightly against the U.S. dollar, closing at 18.6663 per dollar.
This gain followed President Trump's dismissal of Federal Reserve Governor Lisa Cook, raising concerns about the Fed's independence.
The U.S. Dollar Index fell 0.19% as traders reacted cautiously to the news.
Cook plans to challenge her dismissal in court, while traders anticipate potential rate cuts from the Fed.

The Mexican peso strengthened slightly against the U.S. dollar on Tuesday, gaining ground as the greenback weakened after President Donald Trump’s dismissal of Federal Reserve Governor Lisa Cook, a move that raised fresh questions about the central bank’s independence.

The exchange rate closed at 18.6663 per dollar, compared with 18.6913 on Monday, according to official data from Banco de México (Banxico). That left the peso with a gain of 2.5 centavos, or 0.13%.

During the session, the dollar traded in a range between a high of 18.7038 and a low of 18.6168. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell 0.19% to 98.26.

USD/MXN

Trump and the Fed

Trump announced Monday that he was removing Lisa Cook from the Fed’s Board of Governors over allegations of mortgage lending irregularities. In a market searching for new catalysts, traders reacted cautiously.

Analysts noted Trump could use the move to push his agenda within the Fed by appointing officials aligned with his expansionary views. Others warned the decision heightened concerns over the central bank’s independence.

“I think we have good people [to take the role]. In fact, we’re talking to a lot of people who will be involved in the decision,” Trump said during a cabinet meeting, according to Reuters.

Unresolved Issue

The Fed said Cook intends to challenge her dismissal in court and seek a judicial ruling upholding her mandate ahead of the central bank’s next policy meeting. According to CME’s FedWatch tool, traders are pricing in an 88.3% probability of a 25-basis-point rate cut in September, and a 44.3% chance of an additional cut in October.

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ABOUT THE AUTHOR See More

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.