Mexican Peso tumbles on trade war fears, US high yields boost USD
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Mexican Peso weakens as Trump eyes copper tariffs, trade tensions escalate USD/MXN climbs past 20.50 as US Treasury yields rebound. US Treasury Secretary Bessent warns of economic fragility and supports tariffs as a revenue source. Mexico’s Balance of Trade and jobs data are in focus amid rising trade policy uncertainty. The Mexican Peso (MXN) begins Wednesday’s session on the backfoot against the US Dollar (USD) as US Treasury bond yields recover, underpinning the Greenback. The United States (US), imposing tariffs on its allies and adversaries, continued to grab the headlines, while US Treasury Secretary Scott Bessent noted the economy is “fragile.” At the time of writing, the USD/MXN pair trades at 20.51, up 0.24%. A possible trade war spurred by US President Donald Trump keeps the Mexican Peso heavy. He had set his sights on copper and directed the Commerce Department to examine copper tariffs, with Mexico being one of the country’s top importers. Meanwhile, US Treasury Secretary Bessent echoed some of his comments, saying that tariffs would be a source of revenue for the government. Bessent warned that the economy is more fragile than economic indicators suggest, mentioning interest rate volatility, stickier inflation and reliance on government-sponsored job growth. In the meantime, an absent economic docket in Mexico keeps USD/MXN traders leaning on dynamics linked to trade policies between the US and Mexico. Mexico’s Secretary of Commerce, Marcelo Ebrard, said that his first meeting with his counterpart, Howard Lutnick, was used to set the ground and establish general ideas about the importance of trade between both countries. This week, Mexico’s docket will feature the Balance of Trade data for January alongside jobs data. Daily digest market movers: Mexican Peso weakens ahead of Trump’s 30-day tariff deadline The Balance of Trade in Mexico is expected to show a deficit of…
Filed under: News - @ February 26, 2025 3:21 pm