After an initial appreciation of the Mexican peso during the week of Donald Trump's assumption as president of the United States and in light of the threat of tariffs against Mexico and Canada, the currency experienced a drop of 0.18 units on Monday. Meanwhile, the dollar recorded a slight increase in the early Asian trades following the announcements of trade sanctions by Trump against Colombia, reaching 20.44 units per greenback.
The Bank of Mexico reported that the dollar depreciated by 2.36 percent in the first week of Trump's presidency, which meant a loss of 49 cents. Analysts from Goldman Sachs expressed that recent movements in the foreign exchange market could be related to uncertainty surrounding Trump's trade policy. In turn, experts from MUFG mentioned that the dollar's decline could be temporary and linked to a reduction in bullish positions.
Asian stock markets opened cautiously amid news of Trump's sanctions against Colombia, and futures for U.S. stocks retreated in early Asian trading. Global markets were affected by initial concerns about a possible global trade war, although they eased when the president decided not to immediately impose tariffs on imports from Mexico, Canada, and China.
Despite the apparent decrease in the tariff threat, financial markets in Asia remain vulnerable to uncertainty surrounding this issue. BNY strategists in Hong Kong pointed out that a less aggressive tariff tone would be positive in the short term.
