In the complex world of currencies, many emerging market currencies—such as the Indian rupee, the Brazilian real, or the Japanese yen—tend to depreciate against those of developed economies. The U.S. dollar, the euro, and the Swiss franc are considered financial safe havens. Yet, one currency has defied that trend in recent years: the Mexican peso.

Since the 2020 pandemic, the peso has shown surprising resilience. After dropping to over 25 pesos per dollar in March of that year, it has steadily recovered. Last week, it reached 16.5 pesos per dollar—its strongest level since 2015. And on April 21, 2025, it stood at 19.59 in the midst of tensions between the Trump administration and the Federal Reserve. Since Trump’s re-election, the peso has appreciated by more than 5%.

But this strength, far from being universally positive, presents a dilemma for the Mexican economy.

On one hand, a strong currency reduces the cost of imports, benefits consumers, and signals economic stability, attracting foreign investment. It reflects confidence in the country’s economic direction and strengthens its position in international markets.

On the other hand, an overly strong peso can undermine the competitiveness of key sectors such as automotive, agriculture, and textiles, all of which rely heavily on exports. For these industries, selling products abroad becomes more difficult when prices rise due to exchange rate effects. This export cost increase could lead to lower revenues, slower production, and eventually, job losses.

Adding to the situation is the global uncertainty sparked by Donald Trump’s trade policies. The president has threatened to impose 25% tariffs on all Mexican and Canadian goods if the flow of drugs and migrants into the U.S. is not curtailed. He has also hinted at potential tariffs on the European Union, generating volatility in the currency markets. In contrast, the United Kingdom could be exempt, which would strengthen the British pound.

Gold, a traditional safe haven in turbulent times, has responded accordingly: on Monday, it reached a new all-time high of $2,830.74 per ounce, reflecting the growing uncertainty around global trade.

In short, the strengthening of the Mexican peso reflects a more stable and attractive economy—but it also brings internal challenges. The national currency can be both a blessing and a burden, depending on who’s looking: consumers, exporters, or investors.