The Mexican peso began trading on February 11 with a decline against the US dollar. The exchange rate failed to maintain levels below 17.20 pesos per dollar due to growing speculation that the United States might withdraw from the US-Mexico-Canada Agreement (USMCA). This possibility has put pressure on the local currency as well as the Canadian dollar. Additionally, a recent US employment report has reinforced the position of the dollar, influencing expectations about the Federal Reserve’s future interest rate decisions.
Around 7:35 AM Mexico City time, the dollar-peso exchange rate was at 17.22, reflecting a depreciation of 0.22% for the local currency. This was a rebound after hitting a low of 17.13 during overnight trading, as per real-time data.
Gabriela Siller Pagaza, Director of Economic and Financial Analysis at Grupo Financiero Base, noted that both the Mexican peso and the Canadian dollar were depreciating due to speculation that former President Donald Trump was considering a withdrawal from the USMCA. Although he has yet to formally announce any plans, reports suggest he has been querying his advisors on why the US should stay in the agreement.
In the market analysis by WarrenAI, a tool for investors, it was indicated that the USD/MXN pair was experiencing a strong upward break. As of the 15-minute chart, the price was at 17.2285, confirming a bullish trend. The recent momentum has pushed this exchange rate above key resistance levels; however, it is also described as overextended, raising concerns about a potential sharp reversal.
As the behavior of the Mexican peso unfolds, the US dollar is strengthening in the international market. The dollar index, which tracks the performance of the dollar against a basket of six major currencies, rose by 0.25% to reach 97.10.
This increase in the dollar’s strength is linked to the recent US employment report, which revealed the addition of 130,000 non-farm payrolls in January. This figure marks a significant jump from the revised figure of 48,000 in the previous month and is nearly double the projected estimate of 66,000.
The developments indicate continuous market dynamics influenced by international agreements and employment statistics, highlighting the interconnectedness of global economies. As such, investors and traders should remain vigilant to these evolving circumstances that could affect currency valuation.