Mexican Peso Rallies as US Imposes Lower Tariffs

The US dollar (USD) has maintained its broad strength despite softer-than-expected United States economic data. The Conference Board Consumer Confidence Index declined to 90.8 in July from an upwardly revised 92.2 in June, while private employers added an average of only 15K jobs per week during the four weeks ending July 11.

However, the Mexican peso (MXN) has benefited from the latest US tariff announcement, with Washington imposing a 10% tariff on Mexican imports not covered by the United States-Mexico-Canada Agreement. This lower levy helps preserve Mexico's competitive advantage in the US market.

The focus now turns to the Federal Reserve's monetary policy announcement on Wednesday, which is expected to leave interest rates unchanged. Investors will assess whether officials remain concerned about persistent inflation or place greater emphasis on signs of weakening employment and consumer confidence.