The Mexican peso ended Monday's session with gains due to the dollar's weakening, driven by tensions from Donald Trump's government against the Federal Reserve to lower interest rates. The exchange rate stood at 17.9188 pesos per dollar, a 0.36% advance. Analysts attribute this movement to concerns over the Fed's independence.
The US currency showed weakness stemming from Donald Trump's ongoing criticisms of Jerome Powell, the Federal Reserve chairman, for not cutting interest rates further. These political pressures raised concerns about the Fed's independence, benefiting the appreciation of several emerging currencies, including the Mexican peso.
According to Banco de México data, the spot exchange rate closed at 17.9188 pesos per dollar, equivalent to a gain of 6.48 centavos or 0.36% from the previous close. Janneth Quiroz, director of economic and foreign exchange analysis at Monex, stated: “The USD/MXN exchange rate showed a downward bias due to the weakening of the US bill, amid political tensions and concerns over the Federal Reserve's independence.”
The dollar index (DXY), which measures the dollar's strength against a basket of six major currencies, fell 0.27% to 98.60 points. Similarly, the Bloomberg dollar index dropped 0.22% to 1,209.05 points. In bank teller windows, Banamex reported the dollar at 18.39 pesos for sale.
Other appreciating currencies include the Chilean peso by 1.06%, the Russian ruble by 0.73%, and the Thai baht by 0.61%. In the bond market, the US 10-year Treasury yield stood at 4.19%, while Mexico's was at 9.10%. This movement underscores the forex markets' sensitivity to political interventions in US monetary policy.
