- The USD/MXN falls to minimum of the day in 19.86, staying close to the minimum of four months reached on Friday.
- The US dollar weakens after the disappointing US retailers sales.
- The United States confirms the application of reciprocal tariffs from April 2.
- The OECD projects a contraction for the Mexican economy in 2025 and 2026.
The USD/MXN records losses per fifth consecutive day, sliding this Monday to a minimum daily of 19.86, very close to the floor of four months reached last Friday at 19.84. At the time of writing, the USD/MXN is quoted about 19.87, losing 0.27% daily.
The US dollar falls to a minimum of three days after the disappointing US retail sales.
The US retail sales for the month of February have grown by 0.2% monthly, below the 0.7% expected by the market. Excluding vehicles, retail sales have increased by 0.3%, disappointing the estimated 0.5% rise. The data below expectations has weighed on the index of the US dollar (DXY), which has fallen to minimum of three days in 103.38.
The United States has also published its NAHB real estate market index for March, showing a 39 -point drop from the previous and planned 42. This is its lowest level in seven months, specifically since August 2024.
The weak US data keep the dollar pressed down, with expectant operators before the Federal Reserve Meeting of the United States that will culminate on Wednesday with the entity’s statement. Interest rate cuts are not planned, but the focus will be in the Fed projections regarding the number of expected types for this year.
This Monday, the CME Group Fedwatch tool projects a 24.2% chance of a reduction at the May meeting. By June, the possibilities of a cut increased with force to 71.8%.
The OECD projects a contraction of the Mexican economy in 2025 and 2026
The Organization for Cooperation and Development (OECD) has reported today that it foresees a contraction of the Mexican economy of 1.3% in 2025. By 2026, he expects a 0.6%GDP drop. The entity justifies these projections as a consequence of the application of US tariffs to Mexico, which could cause a recession in the country. The OECD also foresees a persistent inflation environment in 2025, placing it at 4.4%.
On the other hand, US President Donald Trump has confirmed today that he will apply 25% reciprocal tariffs from April 2. Mexico maintains its position to wait until that date with the hope of reaching an agreement before announcing retaliation measures.
USD/MXN Price levels
While staying below the psychological zone of 20.00, the USD/MXN can extend its decrease towards 19.76/77, where the minimum of November 2024 are below, below, the pair could find a support in 19.11, soil last October.
Upwards, the 20.00 zone has now become the initial resistance. Above, the mobile average of 100 periods in one -hour graphics located at 20.11 will be the barrier to overcome Ants to aim at 20.40, maximum of last week reached 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.
