Donald Trump’s persistent threat to impose tariffs starting from the early hours of this Tuesday had a notable impact not only on the Mexican peso’s exchange rate but also on U.S. markets. According to the Bank of Mexico, the peso depreciated by 0.68%, equivalent to 13.94 cents against the dollar, closing at 20.7176 units, its lowest level since January 27, 2025, when it ended at 20.7278 pesos per dollar on the wholesale market. During the trading session, the exchange rate fluctuated between a high of 20.7250 and a low of 20.3770 pesos per dollar.
Hours before the market close, Trump confirmed that 25% tariffs on Mexico and Canada would take effect this Tuesday, disregarding the progress made by both countries on commitments agreed upon on February 2, when the president had granted a temporary reprieve to avoid implementing these measures. After the close, in electronic and international trading, the peso saw a slight recovery, reaching 20.6764 units, though it later slipped back to 20.7502.
Analysts note that investors will closely monitor how this situation unfolds: whether the tariffs are effectively applied to these trading partners and for how long, or if a window opens to renegotiate the Mexico-United States-Canada Agreement (USMCA) ahead of schedule. The uncertainty is further fueled by the upcoming European Central Bank meeting, which could influence global markets.
In this context, the U.S. dollar showed signs of weakness. Its index, which tracks its performance against a basket of six major currencies, dropped by 0.89%, settling at 106.605 units based on preliminary data. Meanwhile, the yield on the 10-year U.S. Treasury note stood at 4.149%, significantly below the 4.80% level seen three weeks ago.
Wall Street was not immune to this turbulence. The Nasdaq index plunged 2.64%, closing at 18,350.19 points, while the S&P 500 and Dow Jones fell 1.76% and 1.48%, respectively, weighed down by disappointing U.S. manufacturing activity data. Among the hardest-hit companies, Nvidia lost 8.69%, Tesla 2.84%, Microsoft 2.14%, and Amazon 3.42%.
At the same time, the cryptocurrency market suffered a significant setback after a brief rally on Sunday. A massive sell-off of risk assets, triggered by Trump’s tariff announcements, dragged Bitcoin down by 9.47%, trading at $85,321.69 per unit, from a market capitalization of around $1.7 trillion. Ether, the second-largest cryptocurrency, took an even harder hit, plummeting over 15%, reflecting the intensity of the selling pressure.
“Everything is being sold off today,” summed up Adam Button, an analyst at ForexLive, capturing the climate of nervousness and risk aversion dominating the markets. This scenario blends geopolitical factors, such as trade tensions, with economic indicators sparking caution among investors, who now await clear signals on the direction of global economic and monetary policies.
With information from AFP.
