FX.co ★ Mexican Peso at June-2024 Highs

The Mexican peso has strengthened beyond 17.4 per US dollar, resuming its upward trajectory to reach its strongest position since June 2024. This recovery follows a brief setback caused by renewed trade tensions between the US and Europe, stemming from President Trump's remarks about Greenland, which momentarily shifted global capital toward safer, more liquid assets. The peso's upward movement highlights its inherent resilience, buoyed by the Banco de México's increasingly cautious approach. The central bank has paused its easing cycle, maintaining the policy rate at 7%, thus preserving an attractive real yield that continues to draw interest from non-resident investors in peso-denominated fixed-income securities. Although there were discussions of a measured European response, including the potential deployment of the EU's Anti-Coercion Instrument, and reports of minor reductions in European Treasury holdings, these factors only injected temporary volatility into the global foreign exchange markets.