The Mexican peso depreciated to above 21 to the US dollar on Wednesday morning amid an escalating trade war between the United States and China.
After losing ground during the past three trading days, the peso slid again on Wednesday morning to reach 21.07 to the greenback, according to Yahoo! Finance.
Tipo de cambio de nuevo en 21 pesos por dólar. pic.twitter.com/Ei5iG8WxBv
— Gabriela Siller Pagaza (@GabySillerP) April 9, 2025
The peso subsequently strengthened to trade at 20.95 to the dollar at 10 a.m. Mexico City time.
Compared to the Bank of Mexico’s closing USD:MXN rate on Thursday of 20.81, the peso depreciated 1.2% to reach 21.07. It weakened even as the US dollar lost ground against a basket of major foreign currencies, as measured by the DXY index.
The peso has depreciated around 5% since closing at 19.94 to the dollar last Thursday, the day after United States President Donald Trump announced new tariffs on imports from most countries around the world, but not Mexico.
Trump announced an additional 34% tariff on imports from China last Wednesday and subsequently raised the duty to 84% after Beijing retaliated with its own 34% tariff on imports from the United States.
As of Wednesday, the minimum tariff on Chinese goods entering the United States is 104%, as separate 10% duties went into effect in both February and March. The Chinese government announced it would match Trump’s 84% tariff on imports from the United States, and that duty is now in effect.
The Mexico City-based financial group Monex said on Wednesday that the escalation of the trade war between the United States and China was weighing on the Mexican peso.
“Additionally, local inflation rebounded during March, showing the effect of the first tariffs on prices in our country,” Monex said.
Mexico’s headline inflation rate was 3.80% in March, according to national statistics agency INEGI, up from 3.77% in February. Despite the uptick, the Bank of Mexico is still expected to cut its key interest rate after its board’s next monetary policy meeting on May 15.
The central bank last cut borrowing costs in late March, lowering its benchmark rate by 50 basis points to 9%.
With reports from El Economista and Reuters
Source: Mexico News Daily
