#PCEInflationWatch Mexican Peso treads water as Trump tariffs coming on February 1

Mexican Peso erased gains of 0.61% and turns negatively as Trump's threat of 25% tariffs would be enacted.

The White House denied Reuters’ report about US delaying tariffs implementation to March 1.

Mixed US economic indicators and Fed commentary maintain cautious market sentiment.

The Mexican Peso (MXN) erases some of its earlier gains and losses ground against the US Dollar (USD), down a minimal 0.07% on Friday, extending its drop after losing more than 1% on Thursday.

The tariff trade continues to boost the Greenback, after The White House confirmed that President Donald Trump will enact 25% tariffs on Canada and Mexico, beginning on February 1. The USD/MXN trades at 20.72 after hitting a daily low of 20.45.

Recently, US Press Secretary Karoline Leavitt emphasized that tariffs of 25% would be enacted on Canada and Mexico on February 1, sad that previous reports were wrong. She also added that Washington would apply 10% duties on goods imported from China.

Following the report, the Greenback advanced and the Mexican Peso tumbled, as the USD/MXN soared above 20.70 and retested the daily high at 20.74. below 20.50.

A Reuters report, citing unnamed sources, indicated that the US plans to impose tariffs until March 1. The article noted that former President Donald Trump is expected to announce the tariffs, which will include a process for countries to request exemptions on specific imports.

Aside from this, the latest US inflation report and the Federal Reserve’s (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, increased in December as expected, exceeding November’s reading. In the twelve months to December, Core PCE remained unchanged compared to the latest figures.

The data comes after the US GDP report for the last quarter was weaker than expected and following the Fed’s last monetary policy meeting.