The global financial landscape took a downturn in the final trading session of the week, as concerns over tariffs mounted after US President Donald Trump’s comments on imposing a 50 percent tariff on the European Union. Despite this gloomy outlook, the Mexican peso experienced an unexpected appreciation.
Trump’s threat to impose significant tariffs on Europe sparked a decline in global stock markets. The S&P 500 fell by 1.3 percent, while the Nasdaq dropped 1.7 percent and the Dow Jones slipped 1.1 percent. In contrast, European indices took a hit, with the Stoxx 600 plummeting to 541 points – a decrease of 1.6 percent.
Meanwhile, Asian markets showed resilience, as the Nikkei gained 0.5 percent. However, Mexico’s S&P/BMV IPC index on the Mexican Stock Exchange (BMV) declined by 373.42 points – a loss of 0.64 percent compared to Thursday’s close.
The peso, however, defied expectations and appreciated by one cent or 0.5 percent against the US dollar, with an exchange rate of 19.30 pesos. This represents a potential week-on-week appreciation of 17 cents or 0.87 percent if it closes at this level, having closed at 19.47 on Friday the previous week.
This unexpected turn of events may be attributed to various factors, including investors’ shift in focus towards emerging markets like Mexico as they seek safer investment options amidst global uncertainty.
Source: La Jornada
