Peso and Canadian Dollar Gain Ground as Trump Delays Tariffs

The Mexican peso and Canadian dollar appreciate this week. Both currencies benefit from a one-month delay on the 25% tariffs threatened by U.S. President Donald Trump.

The peso now trades at 20.6403 units per dollar, up by 4.68 centavos or 0.23% from Banxico‘s official Friday close of 20.6871 pesos. This recovery follows a high of 21.2942 on Monday before the agreement.

The Canadian dollar stands at 1.4294 per U.S. dollar, improving by 1.93 cents or 1.33% from Friday’s average of 1.4487. This comes after hitting a 22-year peak at 1.4794.

Both currencies felt pressure from Trump’s tariffs on Monday, but Mexico and Canada reached deals on border surveillance with the U.S., delaying tariffs for a month.

However, the U.S. maintained its 10% tariffs on Chinese goods. This has not only increased risk aversion but also weakened the dollar. The Dollar Index (DXY) drops nearly 0.9% this week to 107.43.

China’s renminbi or yuan depreciates by 0.30%, trading around 7.27 per dollar. It reached a peak of 7.284 on Wednesday, with depreciation moderated by the People’s Bank of China’s rate fixing.

China counters U.S. tariffs with 10% to 15% duties on select products and has launched antitrust probes against companies like Apple in response.

“I think, ultimately, allowing the yuan to weaken will be one of China’s responses, and I would expect more retaliation from China if the U.S. responds with even more tariffs,” says Carol Kong, strategist at Commonwealth Bank of Australia.