- The USD/mxn founces at least four months in 19.84.
- The US dollar records new losses after two days of recovery.
- The preliminary reading of consumer confidence of the University of Michigan falls to a minimum of 28 months.
The USD/MXN is collapsing Friday due to the weakening of the dollar on all fronts. The pair has fallen below the 20.00 zone in the last hours, precipitating to a minimum not seen since November 8 in 19.84. At the time of writing, the par quotes about 19.86, losing 1.09% in the day.
The dollar weakens for the fall in consumer confidence and Canada’s complaint to the US tariff policy
The US dollar index (DXY) is registering losses this Friday affected by multiple factors. The DXY has fallen to a minimum daily in 103.57 after Wednesday and Thursday managed to close with profits after the strong decline on Tuesday.
Today the preliminary index of the feeling of the consumer of the University of Michigan for the month of March. The indicator has fallen to 57.9 points from February 64.7, its lowest level since November 2021. The figure has disappointed the 63.1 points expected by the market. In addition, 5 -year inflation expectations from the University of Michigan have risen to 3.9% from the current 3.5%.
On the other hand, Canada has decided to file a lawsuit before the World Trade Organization (WTO) against the tariffs imposed by Donald Trump. Other countries could join this initiative.
The fears of recession in the United States are accentuated before the Great Commercial War initiated by Donald Trump. The worsening of some economic data and the possible increase in inflation in the coming months are pressing the dollar down.
For its part, Mexico continues in the line of waiting for an agreement before April 2deadline indicated by President Claudia Sheimbaun to retaliate in case negotiations with the United States do not reach fruition.
USD/MXN Price levels
The relative force index (RSI) of 14 shows more space to fall into long -term graphics, although it points to a slight price correction in shorter temporalities. After breaking the important support located in the psychological zone of 20.00, the USD/MXN can extend its decrease towards the 19.76/77 zone, where the minimum of November 2024 are below, below, the pair could find a support in 19.11, October soil.
Upwards, the 20.00 zone has now become an initial resistance. Above, the mobile average of 100 periods in one -hour graphics located at 20.21 will be the barrier to overcome Ants to aim at 20.40, maximum of this week tested on March 11.
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.
