The Mexican peso weakened against the US dollar on January 16, 2025, as investors focused on the inauguration of Donald Trump for a second term as US President. The dollar strengthened globally, with the peso falling 0.75% against the greenback. This comes after three consecutive days of gains for the peso.
Trump's inauguration comes with the threat of imposing hefty tariffs on the three largest trading partners of the US - Canada, Mexico, and China. This includes a 25% tariff on Mexican imports until Mexico takes action against drugs and irregular migration.
The peso was also pressured by expectations of a rate hike by the Bank of Japan next week, which would work against the "carry trade" strategies that have benefited the Mexican peso for years.