USD/MXN remains below 19.00 as Trump grants Mexico 90-day reprieve from 30% tariff hike

• USD/MXN holds losses ahead of US Nonfarm Payrolls due on Friday.
• President Trump granted Mexico a 90-day reprieve from the planned 30% tariff hike on many goods.
• The US Dollar advanced after the PCE report indicated that the Fed may delay rate cuts until at least October.

USD/MXN inches lower after registering gains in the previous five consecutive days, trading around 18.90 during the Asian hours on Friday. The pair struggles as the Mexican Peso (MXN) could gain some ground following the US President Donald Trump's decision to allow more time to negotiate a broader trade deal by granting Mexico a 90-day reprieve from higher tariffs of 30% on many goods.

The United States (US) spared Mexico's non-automotive and non-metal goods, which are compliant with the US-Mexico-Canada Agreement on trade, from a 30% tariff. This decision came after a Thursday call between Trump and Mexican President Claudia Sheinbaum. On Thursday, Sheinbaum posted on X, "We avoided the tariff increase announced for tomorrow," and added that the Trump call was "very good," per Reuters. Additionally, Trump stated on Truth Social that Mexico has agreed to immediately eliminate its Non-Tariff Trade Barriers.

However, the United States would continue to levy a 50% tariff on Mexican steel, aluminum, and copper. A 25% tariff will remain on Mexican autos and non-USMCA-compliant goods not compliant with the USMCA. These tariffs are tied to measures related to the US fentanyl crisis.

President Trump imposed higher tariff rates on US trading partners set to go into effect on August 1. On Thursday, Trump signed an executive order imposing tariffs ranging from 10% to 41% on US imports from dozens of countries and foreign locations, including Canada, India, and Taiwan, that failed to reach the trade deals deadline, per Reuters.

The USD/MXN pair may appreciate as the US Dollar (USD) may regain its ground, as the recent US Personal Consumption Expenditure (PCE) Price Index report suggested that price pressures would increase in the second half of 2025 and delay the US Federal Reserve's (Fed) interest rate cuts until at least October. Traders await the United States (US) Nonfarm Payrolls (NFP), due later in the North American session, which is expected to hold in positive territory in July.