- The USD/MXN falls to new minimum of eight months in 19.15.
- The US dollar falls to a minimum of two weeks due to the lack of progress in Trump’s commercial negotiations.
- Weekly requests for unemployment subsidy grew more than expected last week, weighing on the USD.
- The confidence of the consumer of Mexico improved 46.7 points in May.
The USD/MXN falls on Thursday again, descending from a daily maximum in 19.22 to 19.15, new minimum of 2025 and the last eight months. At the time of writing, the par quotes about 19.15, losing 0.23% in the day.
The US dollar rushes at least two weeks after the weak data of US unemployment applications.
The US dollar index (DXY) drops at least two weeks in 98.55 due to the weak US data and fears for a stagnation of the country’s economy.
To the weak data of yesterday of the private employment ADP and the ISM services PMI, the weekly unemployment subsidy requests are added today. The Applications increased by 8,000 last week, rising to 247,000 From the previous 239,000, worsening the 235,000 planned by the market. In addition, non -agricultural productivity fell 1.5% in the first quarter after 0.8% in the previous period. The decrease fallen from 0.7% estimated. Finally, the unit labor costs increased by 6.6% in the first third of the year, exceeding the previous and planned 5.7%.
In the commercial front, agreements between the United States and China are still announced, although the Xinhua news agency has just published that Donald Trump has maintained a telephone conversation with his homonym Chinese, Xi Jinping.
After the increase yesterday of the tariffs to steel and aluminum up to 50%, reprisals of those affected are expected, which could lead to a new varapalo for the US economy, which runs the risk of stagnating in the midst of the commercial war initiated by Trump.
Mexico will try in Washington an exemption from steel tariffs while the consumer’s confidence rises
In Mexico, the May consumer confidence data has been published today. The indicator has risen 1.2 points, rising to 46.7, its highest level so far this year.
On the other hand, the Secretary of Economy of Mexico, Marcelo Ebrard, will meet tomorrow Friday at Washington with senior US officials to get an exemption to the rise in steel tariffs from 25% to 50% that began to apply yesterday. Mexico is the second largest steel exporter to the United States, so it is directly affected by the measure. The Mexican president, Claudia Sheinbaum, said that if the delegation led by Ebrard does not achieve an agreement, next week she will announce a plan with measures “to strengthen and protect jobs” from the Mexican steel industry.
USD/MXN Price levels
The relative force index (RSI) of 14 remains firm below 50, pointing out the possibility of greater falls in the next few hours. Below the minimum of 2025 in 19.15, the pair could initially fall by 19.11/19.06, where are the soils of October and September, respectively, before meeting the psychological zone of 19.00.
Upwards, the first resistance of the USD/MXN awaits in the mobile average of 100 periods in time graph, in 19.25. Above waiting 19.45, roof of May 22, and above 19.78, higher level of May registered on day 6.
Mexican weight FAQS
The Mexican weight (MXN) is the most commercialized currency among its Latin American peers. Its value is widely determined by the performance of the Mexican economy, the country’s central bank policy, the amount of foreign investment in the country and even remittance levels sent by Mexicans living abroad, particularly in the United States. Geopolitical trends can also affect MXN: for example, the Nearshoring process (or the decision of some companies to relocate the manufacturing capacity and supply chains closer to their countries of origin) is also considered a catalyst for the Mexican currency, since the country is considered a key manufacturing center in the American continent. Another catalyst for MXN is oil prices, since Mexico is a key exporter of the raw material.
The main objective of the Central Bank of Mexico, also known as Banxico, is to maintain inflation at low and stable levels (in or close to its 3%target, the midpoint of a tolerance band between 2%and 4%). To do this, the bank establishes an adequate level of interest rates. When inflation is too high, Banxico will try to control it by raising interest rates, which makes the indebtedness of homes and companies more cooling, thus cooling the demand and the economy in general. The highest interest rates are generally positive for Mexican weight (MXN), since they lead to higher yields, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the MXN.
The publication of macroeconomic data is key to evaluating the state of the economy and can have an impact on the valuation of the Mexican weight (MXN). A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only attracts more foreign investment, but it can encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this fortress is accompanied by high inflation. However, if the economic data is weak, the MXN is likely to depreciate.
As an emerging market currency, the Mexican weight (MXN) tends to rise for periods of risk, or when investors perceive that the general market risks are low and, therefore, are eager to participate in investments that carry a higher risk. On the contrary, the MXN tends to weaken at times of market turbulence or economic uncertainty, since investors tend to sell higher risk assets and flee to the most stable safe shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
