The Mexican peso appreciated slightly on Tuesday after an initial dip during the session, as markets digested new data signaling strength in the U.S. economy.

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The market also reacted to comments from Donald Trump dismissing expectations of limited tariffs.

The exchange rate closed at 20.2952 pesos per dollar, compared to an official close of 20.3096 pesos the previous day, according to the Bank of Mexico (Banxico). This represented a modest gain of 1.44 cents, or 0.07%, for the USD/MXN.

USD/MXN

During the session, the dollar traded within a range of 20.3969 pesos (high) and 20.2634 pesos (low). Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.36% to 108.63 points.

Strong U.S. Data Drives Mixed Reaction

U.S. economic data released Tuesday showed stronger-than-expected activity in the services sector during December. Additionally, the JOLTS job openings report for November revealed an unexpected increase, boosting confidence in the U.S. economy.

Despite this, the peso’s erratic behavior followed a sharp rally the previous day, driven by optimism from a Washington Post report suggesting Trump’s tariff campaign might focus only on critical imports. However, Donald Trump, set to take office on January 20, rejected this speculation via his Truth Social account, reviving concerns over potential trade challenges for Mexico.

Technical Outlook

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From a technical perspective, the Mexican peso appears to be entering short-term strong oversold territory. The first support level is seen at 20.20, with an extension to 20.10, while resistance stands at 20.45.

Markets are likely to remain cautious as trade policy uncertainties and U.S. economic strength continue to influence the peso’s performance.

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

Mexican Peso Gains After a Day of Strong Momentum

From a technical perspective, the Mexican peso appears to be entering short-term strong oversold territory.

2 h ago

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