The Mexican Peso strengthened by 0.58% against the US Dollar, driving the USD/MXN exchange rate below 20.00 amid a risk-averse market sentiment and a weakening US Dollar. Federal Reserve Chair Jerome Powell’s cautious remarks regarding inflation, coupled with acknowledgement of downside economic risks and a robust labor market, have reinforced expectations of a steady Federal Funds rate. China’s stronger-than-anticipated Q1 GDP figures provided support for emerging market currencies, including the Peso, despite US restrictions on chip exports impacting the technology sector and the NASDAQ. Despite ongoing trade tensions, Sheinbaum minimized the potential impact of US tomato tariffs, affirming Mexico’s continued role as a key supplier. At the time of writing, USD/MXN is trading at 19.96. Powell indicated that current monetary policy is appropriately calibrated, describing the economy as “solid” despite existing uncertainties. He also suggested a potential slowdown in Q1 2025 growth, raising concerns about a possible stagflationary environment.
