Despite the imposition of tariffs on steel and aluminum exported from Mexico to the United States since last week, the peso experienced an unexpected recovery, reaching 20.06 per dollar and closing at 20.08 pesos yesterday. This resilience is attributed to several economic and political factors that have impacted investor perception and the stability of the Mexican currency.
One of the key reasons behind this behavior of the peso has been the moderation strategy adopted by the government of Claudia Sheinbaum in response to the protectionist measures of the United States. Instead of retaliating immediately, Mexico has opted for dialogue and negotiation, thereby generating confidence in the financial markets. This conciliatory stance was praised by U.S. Secretary of Commerce Howard Lutnick, who highlighted Mexico's decision not to participate in reciprocal tariff increases.
Marcelo Ebrard, Secretary of Economy, reiterated Mexico's stance to continue negotiations and consult with entrepreneurs before responding, while the appointment of Edgar Amador as the new Secretary of Finance has been well received by the markets. Amador has expressed confidence that there will be no tariff war and has emphasized the strength of the commercial framework and Mexican fiscal stability as protective factors against global volatility.
Investor perception has also been shaped by the belief that the tariffs imposed by the U.S. could be avoidable or temporary, in addition to the depreciation of the dollar worldwide, favoring the appreciation of the Mexican peso. The dollar index has shown a downward trend, benefiting emerging currencies like the peso.
In summary, the strength of the Mexican peso against the dollar despite the tariffs originates from the conciliatory strategy of the Mexican government, the perception that the tariffs could be avoidable or temporary, and the global depreciation of the dollar. However, uncertainty remains in the foreign exchange market, and if the tariffs are implemented strongly in April, the behavior of the exchange rate could change drastically, making the dollar more expensive and affecting Mexican exports.
