USD/MXN drops as US-Mexico near steel tariff removal agreement

USD/MXN has retreated 0.8% (140 pips) to 20.250 following reports that the United States and Mexico are approaching a deal to eliminate President Trump's 50% tariffs on steel imports up to specified volumes. The potential agreement signals improving trade relations between the two nations, supporting the Mexican peso's strength against the dollar. Market participants view this development as a significant de-escalation in trade tensions that have weighed on the peso throughout recent months. The tariff removal would benefit Mexican steel exporters and potentially boost broader economic confidence in Mexico's manufacturing sector. Technical indicators show USD/MXN breaking below the 20.400 support level, with further downside potential toward 20.100 if the agreement is finalized. Traders should monitor official announcements from both governments, as confirmation could accelerate peso gains while failure to reach terms might reverse current momentum.