Mexican peso falls as Trump softens rhetoric on Powell and China

The Mexican peso (MXN) fell slightly against the U.S. dollar (USD) on Wednesday as risk appetite improved and confidence in the greenback recovered after U.S. President Donald Trump denied that he would fire Federal Reserve Chairman Jerome Powell.

Markets were still digesting recent news that U.S. President Donald Trump had toned down his attacks on Powell while softening his tariff stance on China in an effort to reach a deal with Beijing. The Wall Street Journal revealed that Washington is considering reducing tariffs on China, although Trump warned that "it won't be zero."

Wall Street cheered the breaking news, despite subsequent comments from U.S. Treasury Secretary Scott Bessant that Trump had not unilaterally offered to reduce tariffs on China.

In Mexico, retail sales came in weaker than expected in February, according to monthly and annual data from the National Institute of Statistics and Geography (INEGI). Meanwhile, Citi Mexico published its latest expectations survey, with 34 economists updating their forecasts for economic growth, inflation, the USD/MXN exchange rate and the monetary policy of the Central Bank of Mexico (Banxico).

On the Mexican economic calendar, traders brace for the release of mid-month inflation and economic activity data.