Mexican Peso Near 6-Month High
The Mexican peso has appreciated to nearly 19.6 per dollar, reaching a level not seen in approximately six months. This strength is primarily supported by the overall weakness of the U.S. dollar and the comparatively high interest rates maintained by Mexico's central bank, Banxico. Recent remarks from President Trump, criticizing the Federal Reserve and demanding immediate rate cuts, have shaken confidence in the Fed's independence, thereby diminishing the status of U.S. assets as a safe haven. Conversely, Mexico's tighter monetary policy—with Banxico maintaining a policy rate of 11% against an approximate core inflation rate of 4%—continues to attract considerable carry-trade inflows. Additionally, the peso's upward movement has been bolstered by a "very productive" conversation between President Trump and President Sheinbaum, which eased concerns over potential new tariffs on key exports like steel, automobiles, and tomatoes. Furthermore, stable oil export revenues have continued to support Mexico's trade balance, providing further strength to the peso.
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