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The Mexican peso experienced heightened volatility on June 19, 2025, as conflicting forces from global oil markets and shifting US trade policies created uncertainty for the currency. After initially weakening by 0.8%, the peso rebounded in afternoon trading, ending the day nearly flat against the US dollar. Analysts pointed to fluctuating crude oil prices and mixed signals from Washington regarding future trade relations with Mexico as key drivers of the peso’s erratic movements.
Mexico, a major oil exporter, remains sensitive to changes in energy markets. Brent crude prices swung between $82 and $85 per barrel during the session, reflecting concerns over OPEC+ supply discipline and weaker demand forecasts from China. Pemex, Mexico’s state-owned oil company, reported a 5% drop in production for May, exacerbating worries about the country’s fiscal health. The peso’s early decline mirrored these anxieties, but a late-day recovery in oil prices helped stabilize the currency.
Meanwhile, comments from US Trade Representative Katherine Tai regarding the upcoming review of the USMCA (United States-Mexico-Canada Agreement) injected additional uncertainty. Tai hinted at potential adjustments to labor and environmental provisions, sparking fears of renewed trade tensions. Mexico’s economy relies heavily on exports to the US, accounting for nearly 80% of its total shipments. Any disruption to this trade relationship could weigh heavily on the peso.
On the domestic front, President Andrés Manuel López Obrador’s administration unveiled a new infrastructure spending plan aimed at boosting economic growth. The $20 billion initiative, focused on transportation and energy projects, was met with cautious optimism by investors. While the plan could stimulate short-term demand, questions lingered about its funding sources and long-term fiscal impact.
Currency traders also digested the latest FDI (foreign direct investment) figures, which showed a 12% year-on-year increase in Q1 2025, driven by manufacturing and renewable energy sectors. This influx of capital provided some support for the peso, offsetting broader market jitters.
Looking ahead, the peso’s trajectory will likely hinge on oil price trends, US trade policy developments, and domestic economic indicators. With Banxico expected to maintain a cautious monetary policy stance, the currency may remain susceptible to external shocks. Investors are advised to monitor upcoming US non-farm payrolls data and OPEC+ production decisions for further directional cues.
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