Mexican Peso Struggles to Recover

The Mexican peso slid past 18.80 per USD to one-month lows, despite a softer dollar chiefly reflecting domestic headwinds and tariff anxieties overwhelming the Mexican currency. July’s S&P Global Manufacturing PMI remained in contraction at 49.1 for the thirteenth consecutive month, while business confidence sat below breakeven at 49.4, signaling subdued export demand and muted capital expenditure. At the same time, the looming threat of 50% steel and aluminum duties and 25% levies on autos, even after a 90-day reprieve, has stoked risk aversion toward peso assets, as market participants fear a hit to trade flows and corporate earnings.