- The USD/MXN rises to maximum this week at 19.35.
- The US dollar rebounds on Wednesday thanks to the improvement of US USA data and optimism for negotiations between the US and the EU.
- The focus of the day is in the minutes of the Fed that will be published at 18.00 GMT.
The USD/MXN has raised today from a minimum daily in the Asian opening in 19.26 to a maximum of three days in 19.35. The par is quoted when writing on this roof, winning 0.48% in the day.
The US dollar takes a respite waiting for the Fed minutes
The American dollar index (DXY) today benefits from the improvement of US data published yesterday. First, the consumer’s confidence of the Conference Board rose to 98 points in May since April 86, while the requests for lasting goods fell by 6.3% in April, improving the estimated 7.9% decrease.
The dollar today rises to three -day maximums in 99.98 measured by its DXY index, also favored by the way optimism of the market before a possible commercial agreement between the United States and the European Union in the coming days.
Waiting for novelties on tariffs, investors will be very pending today of the Fed minutes, which will be published at 18.00 GMT. It is expected that the minutes of the May meeting of the Federal Reserve offer clues to what extent the impact of tariffs on US inflation. In addition, any comment on the path of interest rates in the next meetings could generate volatility in the dollar, although it is believed that the entity will maintain its restrictive position.
The Secretary of Economy of Mexico points out that much of the trade with the US lacks tariffs
Marcelo Ebrard, Mexican Economy Secretary, said Tuesday that almost 90% of trade with the United States has no tariffs. In addition, he informed that as of September the terms of agreement of the TMEC will be reviewed and pointed out that Mexico will play a strategic role in a new global commercial order led by the USA.
In the front of the data, Mexico will publish tomorrow the minutes of the Monetary Policy Meeting of Banxico. On Friday, the April unemployment rate will be announced, waiting for a 2.5% rise from the current 2.2%.
USD/MXN Price levels
The relative force index (RSI) of 14 is above 70, showing the USD/mxn upward movement fully overcompared in one -hour graphics, so short -term correction could be anticipated.
The first support in case of correct appears in the mobile average of 100 in time graph, in 19.26. Below, the pair needs to break below the minimum of 2025 reached on Monday and Tuesday in 19.18 to go to the 19.11/19.06 area, where are the soils of October and September, respectively.
In case of continuing, the first resistance is in the 19.45/19.50 area, where the maximums of last week are located. Above, the goal is on the roof of May at 19.78.
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.
