Mexican peso at year-to-date low on looming tariffs
The Mexican currency weakened on Friday to 19.82842 per dollar for the first time since December 27. Traders took cover on fears of massive losses for domestic producers which would also translate to a shock for the budget, as United States President Donald Trump said tariffs of 5% would be rolled out for goods from the neighboring country and gradually increased.
The decision brings the dispute over illegal immigration to the trade front and he urged the other side to come up with a solution. Import levies would be especially hurtful for carmakers and they could also disturb the establishment of the US-Mexico-Canada Agreement, or USMCA. Global economic growth has been slowing amid a group of factors and risks including Brexit and the failed bilateral talks between the US and China.
The dollar jumped 2.81% to 19.6805 pesos at 7:34 am ET. Today's spike was also the steepest since October 29. The euro advanced 2.95% to 21.931.55 Mexican pesos following a rally to 22.1155, a level unseen since January 10.