The Mexican peso regained ground on Friday morning after hitting its lowest level in two and a half years.
This recovery comes amid an erratic market.Investors remain nervous about Donald Trumps upcoming presidential inauguration on Monday.
The Bank of Mexico (Banxico) reported the pesos slight appreciation against the US dollar.The spot exchange rate stood at 20.7363 pesos per dollar.
This marks a recovery of 8.24 cents or 0.40 percent for the peso compared to yesterdays official Banxico closing rate of 20.8187 units.The dollar price fluctuated between a high of 20.9393 and a low of 20.7204 units.
The Dollar Index (DXY) rose 0.16% to 109.11 units.
This index compares the greenback against a basket of six reference currencies.In addition, the slight increase indicates ongoing strength in the US dollar against other major currencies.
Donald Trumps impending second term as US President has caused market jitters.Mexican Peso Rebounds After Hitting Two-and-a-Half-Year Low.
(Photo Internet reproduction)His first term saw actions against Mexico and China.
During his campaign, Trump promised tariffs on Canada, Mexico, and China, including a 25% tariff on Mexico.Pesos Outlook Amid US-Mexico Trade DynamicsBanamex analysts outlined two scenarios for peso strengthening.
The first involves less aggressive tariffs than expected.
The second scenario sees Trump imposing higher tariffs on China while sparing Mexico and the rest of the world for now.Mexico solidified its position as the United States main trading partner last year.
From January to November, 83% of national exports went to the US.
This relationship drives the Mexican economy, making it vulnerable to US policy changes.The peso depreciated sharply by 1.60% yesterday.
This drop followed strong US labor and retail sales data, showcasing the American economys robustness.
The week closes with a session of few changes and no significant economic indicators scheduled.Monex Grupo Financiero analysts noted the pesos benefit from the dollars correction.
This follows the greenbacks upward push in the overnight session.
Markets now await more economic data from the United States to guide future movements.