- The USD/MXN rises to a maximum of 19 days in 19.78.
- The US dollar falls against many of its counterparts but is strengthened against Latin American currencies.
- The focus revolves to the Fed while impatience grows due to the absence of conversations between China and the United States.
The USD/MXN has begun on Tuesday testing a daily minimum of 19.68 but has subsequently won traction, raising a maximum of 19 days in 19.78 at the opening of the American session. At the time of writing, the dollar is quoted in front of the Mexican peso over 19.75, winning 0.30% daily.
The US dollar goes back to a minimum of six days although it maintains the fortress against the main Latin American currencies
The US dollar index (DXY) is falling this Tuesday at least six days in 99.25. The absence of conversations between the United States and China to solve the tariff conflict is weighing on the US currency despite the advertisements of the Treasury Secretary, Scott Besentensuring that the United States is negotiating with many countries and that agreements could be announced as soon as this week. Besent has confirmed that there have been no conversations with China yet, which is affecting the dollar and even more to its counterparts in Latin America, which yield land in front of the green ticket.
American data published today have accentuated the weakness of the dollar, with the March trade balance expanding its deficit at -140.5b of dollars From the -123.2b of February, worsening the estimated -129b. On the other hand, the IBD/TIPP Economic Optimism Index for May has dropped to 47.9 points from April 49.1, disappointing the 50.2 expected by the market. This is its lowest level in seven months.
Waiting for news about tariffs, the focus now turns to the Federal Reserve Monetary Policy Decision from the United States, which will be announced on Wednesday at 6:00 p.m. The Fed is expected to maintain its interest rates without changes in 4.5% by the third consecutive meeting, despite the repeated comments of the US president, Donald Trump, insisting on a reduction.
USD/MXN Price levels
The short term in time chart remains upward while in broader temporalities it turns neutral. To see greater increases, the USD/MXN should clearly break above today’s maximum in 19.78, pointing to the psychological zone of 20.00. Above this region, the barrier will be at 20.28, mobile average of 100 periods in day graph.
Downwards, the first support is in the 100 -hour mobile average of an hour graph at 19.63. Below, the objective will be at a minimum of 2025 registered on April 23 in 19.46.
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.
