President Donald Trump not imposing tariffs on Mexican products had a favorable effect on the market of the Mexican, which experienced a strengthening of its currency.
On Monday, July 1, Trump ruled out taxing imports from its southern neighbor after the government of Andrés Manuel López Obrador adopted measures to strengthen border security in the face of the advance of illegal immigrants from Central America, Forbes Mexico reported on July 2.
President Trump’s statements were well received in the markets of the Latin country whose agents demanded a greater number of Mexican pesos. Indeed, on Tuesday the dollar closed at 19.056 Mexican pesos (almost six cents less than Monday).
For his part, López Obrador was satisfied with Trump’s decision.
“I am grateful that President Trump is letting us know that the commitment is being fulfilled and that there are no tariff threats,” López Obrador said in his usual morning press conference quoted by Reuters.
According to analysts consulted by the British agency, the Mexican peso has also been strengthened by the agreements reached by the United States and China on Saturday last week during the G-20 summit where both powers expressed their willingness to resume trade negotiations.
On the other hand, the appreciation of the Mexican currency was limited by the decline in oil prices (Mexican oil was sold on Tuesday at 60.60 pesos per barrel – 0.79% less than on Monday).
This moderation was also reflected in the Mexican Stock Exchange. Its most representative indicator, the S&P/BMV IPC, rose just 0.17%.