The Mexican peso appreciated against the US dollar on Monday morning due to increased appetite for riskier assets after United States President Donald Trump exempted smartphones, computers and some other tech products from his so-called “reciprocal tariffs,” including a 125% duty on imports from China.

After closing at 20.29 to the greenback on Friday, the peso strengthened to 20.02 to the dollar on Monday morning, according to Yahoo! Finance, representing an appreciation of just over 1.3%.

At 1 p.m. Mexico City time, the peso was trading at a slightly weaker 20.11 to the dollar.

The strengthening of the peso to close to 20 to the dollar on Monday came five days after the currency weakened to above 21 to the greenback amid an escalating trade war between the United States and China. As the strengthening came at the beginning of Semana Santa, or Holy Week, the El Financiero newspaper described it as a “santa apreciación” or “holy appreciation” in a headline.

The Trump administration’s announcement on Friday that it was dropping “reciprocal” tariffs on tech products including smartphones, computers, semiconductors and flat panel TV displays — at least temporarily — increased investors’ appetite for riskier assets such as the Mexican peso.

Analysts from Mexican bank Banco Base said that the appreciation of the peso was due to “a decrease in risk aversion” after Trump dropped 125% tariffs on cell phones, computers, semiconductors and other electronic devices imported from China.

A 20% “fentanyl tariff” on goods sent to the U.S. from China remains in effect.

The DXY index, which measures the US dollar against a basket of six major currencies, declined on Monday morning, indicating a general weakening of the greenback.

The peso has mostly traded at above 20 to the US dollar this year, although it strengthened to below the 20-to-the-greenback level for a brief period in March. Trump’s on-again, off-again tariffs have caused volatility in the USD:MXN exchange rate.

In April last year, the peso reached an almost nine-year high of 16.30 to the dollar, but depreciated significantly later in 2024 due to a range of factors including the ruling Morena party’s comprehensive victory in Mexico’s 2024 elections, Congress’ approval of a controversial judicial reform and Donald Trump’s victory in the U.S. presidential election last November.

With reports from El Financiero and El Economista