The administration just announced that they will be adding another 100 billion in tariffs against China. It’s hard to grasp what that means for the stock and currency markets. The markets have rallied substantially over the last three days. The Dow Jones has rallied almost 1200 points off the most recent bottom. So, a big correction really wouldn’t harm the markets too much. Just when things appeared to be adjusting to the social media issues, we now have more to worry about. The markets don’t like uncertainty and the administration seems to promote it. Usually, the administration makes these announcements early in the week and by Thursday the posture has changed somewhat.  However, we will be dealing with the weekend and that could cause some additional profit taking. I guess we’ll find out tomorrow. My belief remains that we will see a sideways market for some time, though the volatility should remain high.

The US dollar has been very weak against the Mexican peso for the last three weeks. The dollar showed a decent rally today, pushing the spot price up to a two month high.

As I have mentioned, the Mexican peso has been strong against the dollar. Today, we saw a bit of a reversal. We still need a significant rally in the dollar to weaken the peso. This may have been taken off the table unless the administration backtracks early on Friday about the trade tariffs. We still have the NAFTA talks in April and the election in Mexico in July that could weaken the peso. A lot of cross currents going on.

I guess we should be getting used to this…….

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