(Bloomberg) — The Mexican peso led a rebound in emerging-market currencies after President Claudia Sheinbaum said US tariffs on Mexico would be delayed for one month after a conversation with Donald Trump.
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The peso, which fell as much as 3% earlier as traders weighed impact of the 25% levies on Mexico and Canada, erased losses on Sheinbaum’s comments. It was trading about 0.8% higher versus the dollar, the best performer among major currencies. The Bloomberg dollar gauge trimmed its advance, touching a session low.
Indexes for developing nation currencies and stocks, which were losing the most since Trump secured a second term in November, also rebounded.
The prospects of a trade war had investors upping their bets on the dollar on a view that the tariffs will fuel inflation and limit the room for the Federal Reserve to cut interest rates. Traders also expect the levies to hurt foreign economies more than the US, as American demand declines for costlier imports.
—With assistance from Nicolle Yapur.
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2025-02-03 09:46:13
