- The USD/MXN falls to a minimum of ten days in 19.51.
- The US dollar rebounds with the announcement of agreement between the US and the United Kingdom but yields to the Mexican peso.
- The general inflation of Mexico and the underlying index rise to 3.93% annual in April, above the expected.
The USD/MXN has operated in a narrow range during the first half of Thursday. The pair rose in the European morning to a daily maximum in 19.62 but fell after the inflation data of Mexico to a minimum of ten days in 19.51, where it now operates losing 0.38% in what we have been in time.
The US dollar rebounds before Trump’s announcement, but fails to bend to the Mexican peso
The US dollar index (DXY) was strengthened after Donald Trump’s announcement in Truth Social, where he pointed out that today he would make a great press conference to announce an agreement With an important country. The green ticket has reached six days as a reaction to the news, rising to 100.21, although in the last hours optimism has been diluted and has lost traction despite remaining positive.
The dollar had already taken impulse yesterday after the Fed announced that it maintained its interest rates without changes in 4.5% and its president, Jerome Powell, was shown without hurry to cut the types, pointing out that they should now wait.
Trump’s press conference is expected today at 14.00 GMT. According to Sky News and other media, the US president will announce an agreement between the US and the United Kingdombut this could be a general agreement, with points to be specified, which has reduced the initial impulse of the dollar.
The underlying inflation of Mexico jumps to 3.93% in April
He Mexico Consumer Price Index (CPI) rose to 3.93% per year in April from 3.8% in March. The indicator has reached its highest level in four months and has slightly exceeded 3.9% expected by the market. Monthly inflation advanced at a rate of 0.33% in April, slightly above 0.31% and 0.30% planned.
The underlying IPC, which excludes food and energy, grew 0.49% monthly from the previous 0.43%, standing above 0.47% estimated. The Annual underlying inflation has been the one that has registered the highest rise, when rising to 3.93% from the previous 3.64%.
The Mexican weight has reacted to the data, since the increase in underlying prices could influence the Banxico monetary policy decision on Thursday, May 15. The entity cut its interest rates in 50 basic points in March to 9% and in its statement pointed out that it could continue to reduce its types in a similar magnitude based on the evolution of inflation.
USD/MXN Price levels
The 14 -day relative force (RSI) index is well settled below 50 in short and long term graphics, aiming to extend losses, since it has not yet entered into over -sales territory.
The initial support appears in the minimum of 2025 registered on April 23 in 19.46. A rupture of this level would point towards 19.11/19.06, soils in October and September 2024, respectively.
Up, the USD/MXN clearly needs the mobile average of 100 periods in time graph at 19.63 to be able to move around 19.78, a roof of the last three weeks recorded on Tuesday. Above, the objective is in the psychological zone of 20.00.
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.
