FX.co ★ Mexican Peso Reaches June-2024 Highs

The Mexican peso has strengthened beyond 17.5 per US dollar, marking a return to its highest levels since June 2024. This resurgence follows a temporary dip caused by renewed trade tensions between the United States and Europe, sparked by President Trump's comments about Greenland. These tensions had briefly motivated global investors to seek safer and more liquid assets. The peso's upward movement highlights its inherent resilience, bolstered by Banco de México's cautious approach. By pausing its interest rate cuts and maintaining the policy rate at 7%, the central bank provides an attractive real yield, continuing to draw interest from non-resident investors in peso-denominated fixed income securities. Meanwhile, discussions around potential European countermeasures, including the possible deployment of the EU’s Anti-Coercion Instrument, and reports of slight reductions in European Treasury holdings, introduced temporary volatility into global foreign exchange markets.