USMCA talks have reportedly been postponed, and the Mexican peso remains weak amid dollar and yen strength. While the Mexican government has indicated a policy of increasing imports from the United States, the talks could also be prolonged, drawing attention to developments ahead.
Talks on reviewing the USMCA (United States-Mexico-Canada Agreement) scheduled for 28 and 29 September were postponed to October, with the dates yet to be determined. Mexican President Claudia Sheinbaum indicated a policy of increasing imports from the United States and reducing imports from other countries, but no compromise is yet in sight in talks over the automotive and steel tariffs, the main points of contention, or stricter rules of origin for automobiles.
The peso moved to its lowest levels against both the dollar and yen since April. The dollar rose against a backdrop of expectations that the Federal Reserve would accelerate rate hikes, while the yen rose against the dollar on expectations that US and Japanese leaders share the view that the yen's weakness should be corrected. At one point, the peso/yen exchange rate fell to around ¥8.844.
The outlook for prolonged USMCA review talks is said to have the potential to create additional downward pressure on the peso, and some market observers believe developments should be monitored closely. Attention is focused on foreign-exchange market trends alongside the weekly chart.
The article explains trends in the US and Mexican economies and the Japanese yen, as well as the outlook for the peso and factors affecting it, and warns that the peso's trajectory may change depending on how the scenario unfolds.