MEXICO CITY, July 13 (Reuters) – The Mexican peso fell sharply against the US dollar on Monday, as escalating geopolitical tensions between the United States and Iran in the Strait of Ormuz triggered a flight to safe-haven assets. The conflict is shaking emerging market currencies. The peso is the most exposed.
On Monday, July 13, the US dollar to Mexican peso exchange rate opened at 22.85 pesos per dollar. This represents a 1.2% depreciation from Friday’s close of 22.58. At major Mexican banks, the buying price for the dollar ranged from 22.40 pesos at Banamex to 22.55 at BBVA. The selling price was between 23.10 and 23.30 pesos. The sell-off accelerated after midday.
| Bank | Buy Price (MXN) | Sell Price (MXN) | Change vs. July 10 Close |
|---|---|---|---|
| Banamex | 22.40 | 23.30 | -1.2% |
| BBVA | 22.55 | 23.20 | -1.1% |
| Santander | 22.48 | 23.25 | -1.3% |
The Strait of Ormuz crisis hits the peso harder than most peers. Mexico is a major oil exporter, but also imports refined fuels. A spike in oil prices due to supply disruption fears increases inflation. This erodes the peso’s purchasing power. Investor risk aversion is draining liquidity from the peso. Demand for the dollar as a safe haven is rising.
Trump’s stance is clear. On Sunday, the US Navy deployed additional assets near the strait. Iran responded with threats to close the waterway. The White House warned of “severe consequences.” These events drove a sudden peso sell-off.
The conflict triggers chain reactions in the Mexican economy. Higher fuel costs push up consumer prices. Banxico may be forced to intervene or raise rates to defend the peso. Remittances, a key source of dollar inflows, are not yet affected. Cross-border trade faces higher hedging costs.
Short-term technical analysis shows support for the USD/MXN pair at 22.70. Resistance is at 23.50. If tensions de-escalate, the peso could recover to 22.30. A full conflict could drive it past 24.00. Analysts are watching the end of July with caution.
For those holding pesos, now is a time to monitor volatility. Hedging strategies for businesses and travelers are advisable. Key indicators include oil prices and White House statements.
💡 Frequently Asked Questions (FAQ)
- Q: Why did the Mexican peso fall against the US dollar on July 13?
- A: The peso depreciated 1.2% to 22.85 per dollar due to escalating US-Iran tensions in the Strait of Ormuz, which triggered a flight to safe-haven assets like the US dollar.
- Q: How does the Strait of Ormuz conflict affect the Mexican peso?
- A: The conflict drives oil price spikes, increasing inflation in Mexico as it imports refined fuels, while investor risk aversion drains peso liquidity and boosts dollar demand.
- Q: What was Trump’s role in the peso’s decline?
- A: Trump’s deployment of US Navy assets near the strait and warnings of ‘severe consequences’ to Iran’s threats escalated tensions, directly causing the peso sell-off.
Extended Reading
According to reports from Yahoo Finance and El Financiero, the peso is directly affected by the Trump-Iran conflict in the Strait of Ormuz. The peso is falling today as the dollar strengthens. The core driver is geopolitical risk, not domestic fundamentals. The peso’s fate is tied to oil markets and Trump-Iran diplomacy.