Dollar fell 4.4% against major currencies in April

The dollar recorded its largest depreciation in April in more than two years against major currencies such as the euro, Swiss franc, Japanese yen, pound sterling, and Swedish krona, due to uncertainty about an economic recession in the United States and the trade policies of US President Donald Trump.

The Intercontinental Exchange's Dollar Index (DXY), which measures the greenback against a basket of six benchmark currencies, fell 4.44% to 99.27 points during the fourth month of the year. This result represented its largest monthly decline since November 2022, when it fell 5%.

The most appreciated currencies in April were mainly from advanced economies and safe-haven currencies such as the Swiss franc (6.57%), the euro (4.67%), the Japanese yen (4.61%), the Czech koruna (4.44%), the Danish krone (4.40%), the New Zealand dollar (4.39%), and the Mexican peso (4.14%).

On the other hand, the most depreciated currencies were the Argentine peso (9.15%), the South African rand (1.54%), the Turkish lira (1.44%), the Colombian peso (1.01%), the Chinese yuan (0.30%), and the Indonesian rupiah (0.14%).

“Several major currencies strengthened against the dollar in April as rising uncertainty tested their historic status as safe haven assets,” Callee Davis, senior economist at Oxford Economics, said in an analysis.

He added that currency behavior will continue to be focused on the risks of a short-term US recession. "However, we could see a return of capital flows into US assets, driving a stronger dollar in the second half of the year, as the market focuses on stronger fiscal policy and a less dovish Federal Reserve. This would lead to currency weakness."

"The current environment reflects a U.S. economy in structural slowdown, pressured by tariff policies that, far from fostering immediate growth, have generated uncertainty, distortions in investment, and pressure on supply chains," said Felipe Mendoza, Financial Markets Analyst at ATFX LATAM.

He warned that the baseline scenario is one of sustained volatility, with downward pressure on risk assets if macroeconomic data continue to confirm instability in the United States.

He stated that the second half of the year will depend largely on Washington's ability to balance its protectionist agenda with the need to revive demand and stabilize expectations.

Weight, one of the strongest

The Mexican peso appreciated against the dollar in April, posting its best month in more than three years, supported by the U.S. government's decision not to include Mexico among its global tariffs.

According to official data from the Bank of Mexico (Banxico), the peso closed at 19.6136 pesos per dollar, an appreciation of 4.14% or 84.68 cents. With this, the exchange rate registered its best month since December 2021, when it appreciated 4.47 percent.

Last month, the Mexican currency hit a high of 20.8083 pesos on the 8th and a low of 19.5223 pesos on the 25th, a level not seen since October 14, 2024.

Gabriela Siller, director of Analysis at Banco Base, highlighted in a report that the peso's appreciation in the month was due to the absence of reciprocal tariffs against Mexico.

"The tariff exemption sent a signal that the countries participating in the USMCA will receive preferential treatment from the Donald Trump administration. This could lead to a strengthening of trade relations between North American countries," he explained.

He added that during the month, Donald Trump repeatedly pressured Fed Chairman Jerome Powell to cut interest rates, and there was even speculation that they were investigating ways to remove him from office.