The Mexican Peso (MXN) is experiencing significant pressure as Donald Trump moves closer to securing a second term in the White House, with the latest election results showing him leading with 267 electoral votes. The Peso has plunged nearly 3% against the US Dollar (USD), extending its recent downtrend as concerns over Trump’s trade policies weigh heavily on the currency.
Trump’s victory appears increasingly likely, with the Republican nominee just three electoral votes shy of the 270 needed to win. The Republican Party’s gains in the Senate and potential control over Congress have further amplified uncertainty in financial markets, sending the USD soaring against the Peso. Trump’s promise of imposing punitive tariffs on Mexican imports has been a key factor behind the Peso’s downfall, as traders anticipate the negative impact on Mexico’s export-driven economy.
The Impact of Trump’s Policies on the Peso
With Trump threatening hefty tariffs on Mexican goods, the Peso’s outlook remains bleak. The currency is currently trading in the 20.60s against the Dollar, but experts predict it could weaken further if Republicans take control of both Congress and the Senate. According to El Financiero, the Peso may slide to a range between 21.14 and 22.26 if Trump secures a victory with Republican backing in Congress.
Conversely, if Trump wins without a Republican majority in Congress, analysts forecast the Peso could find some support, trading between 19.70 and 21.14. However, the overall sentiment remains negative, with market participants wary of the potential for escalating trade tensions between the US and Mexico.
Domestic Struggles Add Pressure to the Peso
In addition to external political risks, the Peso is grappling with domestic concerns. Recently, the Mexican Supreme Court rejected a controversial law that would have allowed for the election of judges by popular vote. Critics argue that such reforms could undermine judicial independence and fuel concerns over the rule of law, which could deter foreign investment in Mexico.
The rejection of this reform is another blow to investor confidence, adding to the Peso’s struggles as market participants grow increasingly cautious about Mexico’s political and legal stability.
Also read : Mexican Peso Down 3%- Can USD/MXN Hit 22.00 In 2025 Amid Trump Presidency?
Technical Analysis: USD/MXN in Bullish Territory
Technically, the USD/MXN currency pair has closed the gap that was left open earlier in the week and is firmly entrenched in an uptrend. The pair is currently trading within a bullish rising channel, with the trend showing strength across all timeframes. The Relative Strength Index (RSI) is hovering just below the overbought level of 70, indicating there is room for further upside movement.
A break above the 20.80 resistance level could trigger further gains, with the next significant target being 21.00, a psychological milestone that could act as both support and resistance.
