The dollar starts strong in Mexico amid global trade tensions
On Wednesday, April 9, 2025, the dollar began its day with a notable appreciation against the Mexican peso, reflecting the ongoing uncertainties in the global economic landscape influenced by recent tariff measures imposed by the Trump administration.
At 7:00 a.m. CDMX time, the dollar was quoted at 20.99 Mexican pesos, marking an increase of 0.74% from the previous day's close of 20.84 pesos. This upward trend is indicative of a broader pattern seen in international markets, where currencies are reacting to escalating trade tensions between the United States and China, which have raised concerns among investors.
According to various banks in Mexico, the dollar's buying and selling rates were as follows:
- Afirme: Buy at 19.40, Sell at 21.00
- Banco Azteca: Buy at 19.65, Sell at 21.15
- BBVA Bancomer: Buy at 19.99, Sell at 21.14
- Banorte: Buy at 19.15, Sell at 20.80
- Citibanamex: Buy at 20.20, Sell at 21.35
- Scotiabank: Buy at 18.00, Sell at 21.50
Despite this initial strength, the peso has been under pressure due to the intensifying trade war, with the interbank exchange rate dropping to 20.97 pesos per dollar at the start of the session. Throughout the day, it was observed to fluctuate, reaching around 20.68 pesos, but still indicating a depreciation of 0.69% compared to the previous close.
This decline reflects a cumulative weekly loss of 2.63% and a monthly drop of 3.76%, which highlights the ongoing challenges faced by the peso in the current economic climate. The situation has been exacerbated by the announcement from the Trump administration that tariffs on Chinese goods have been raised to as much as 104%. In retaliation, China has implemented its own tariffs, raising them by 84%, which has further fueled market volatility.
Market analysts noted that the peso's performance is significantly influenced by external factors rather than domestic issues. Felipe Mendoza, a financial market analyst, mentioned that the escalating trade conflict has led to increased nervousness among investors, prompting them to seek safer assets.
The Dollar Index (DXY), which measures the strength of the dollar against six other major currencies, also experienced a decline of 0.67% to 102.28 units, reflecting the overall sentiment in the currency markets.
In Mexico, inflation has been on the rise, with March seeing an increase of 0.31%, bringing the annual rate to 3.80%. This uptick in inflation is closely tied to the effects of the recent tariffs, which have begun to impact consumer prices. Local economic conditions are further complicated by expectations that the Bank of Mexico (Banxico) may need to adjust its monetary policy in response to these inflationary pressures.
Looking ahead, the market is keenly awaiting inflation data from both Mexico and the United States, scheduled for release on Wednesday and Thursday, respectively. These figures are expected to provide critical insights into future currency movements and the broader economic outlook.
In a related note, the euro has appreciated by 0.78% against the dollar, while the British pound has seen a slight increase of 0.06%, showcasing the varied responses of currencies to the prevailing uncertainties.
As the day progresses, the Mexican peso continues to be a focal point for traders and investors alike, with many keeping a close eye on developments from Washington and Beijing. The ongoing trade negotiations and tariff discussions are likely to shape the currency's trajectory in the coming days, as the market grapples with the implications of these policy changes.
In summary, the dollar's strong start against the peso today reflects a complex interplay of international trade dynamics, local inflation pressures, and investor sentiment. With the global economic landscape shifting rapidly, the coming days will be crucial for understanding the future direction of the peso and the broader implications for Mexico's economy.
