The Mexican peso closed this Wednesday with an appreciation of 1% amid news from Washington about Donald Trump's tariff plans. Despite the implementation of a 25% tariff on Mexican products, the currency has remained stable around 20 units per dollar. At the end of the day, it is quoted at 20.38 pesos per dollar, boosted by the announcement of a one-month pause on tariffs for automobiles produced in Mexico and imported to the U.S.
Analysts agree that the strength of the peso is due to the perception that Trump's tariff measures will not be long-term, which prevents the risks to the Mexican economy from being discounted. The White House confirmed the one-month pause for the automotive sector, but entities such as Deutsche Bank warn of potentially significant impacts if trade retaliations do not change from the U.S.
For example, Deutsche Bank points out potential consequences such as the peso hovering around 21 and 22 pesos per dollar, impacts on inflation, pressures on inflation targets, lower growth, weakening of foreign direct investment, and the current account. Given these scenarios, analysts predict that credit rating agencies will review Mexico's rating, anticipating at least a downgrade in the outlook.
