- The UDS/MXN falls at least ten days at 20.02.
- The US dollar records losses for the third Constitutional day.
- The US announced on Saturday that it reduced tariffs that affected the electronics sector in China at 20%.
On Monday it has started for the USD/MXN testing a daily maximum in 20.33, but it has quickly begun to give ground, affected by the change of the US script with respect to the tariffs to China in some products. The pair has turned down, falling into the opening of the American session to a minimum of ten days at 20.02.
At the time of writing, the USD/MXN torque is traded on 20.03, losing an important 1.46% in what we have been working on.
The US dollar is approaching the minimum of three years reached on Friday
The US dollar index (DXY) records losses for the third day in a row on Monday. He Green ticket has fallen to 99.21, approaching at least three years reached Friday at 99.02.
Tariff fluctuations continue to weigh in the dollar, increasing the fears of stagflation in the US economy. The last chapter presented on Saturday, when the United States announced that it canceled the additional tariffs of 145% to China in products that affected the electronic sector, including computers, mobiles and semiconductors, among others. Now, The Asian country will only have to pay 20% of tariffs initially imposed.
However, the market was working again on Sunday, when the US Secretary of Commerce, Howard LutnicK, he said in an interview with ABC News on Sunday These products, together with the semiconductors, will face new separate levies in the next two months.
In the next few hours, the operators of the PAR will continue to pending the headlines on the tariffs, but also of the Speeches of Fed members. The moderation of the inflation of consumer prices and production prices in the US last week, can make the Federal Reserve award the trimming of interest rates to the May meeting. Today they will speak several members of the Fed, including Thomas Barkin, president of the Richmond Federal Reserve, Christoher Waller, a member of the Board of Governors of the Fed, Patrick Harker, maximum representative of the Federal Reserve of Philadelphia, and Raphael Bostic, president of the Fed of Atlanta. Their comments can cause volatility in the dollar, as they could give clues about the next steps of the Fed.
In Mexico there will be no relevant publications this week, marked by Holy Week holidays.
Last Thursday, Mexico published the Minutes of Banxico, in which interest rates cuts in the next meetings were anticipated. The Governor of Banxico, Victoria RodrÃguezHe said that the entity has managed to solve the inflationary episode of the global impacts derived from COVID and the Ukraine War. Although he acknowledged that there is still a way to go and face the challenges with the US, he pointed out that he trusts the flexibility of the Mexican economy.
USD/MXN Price levels
The relative force index (RSI) of 14 is in the hour graph, pointing to a possible short -term correction, although in broader graphics, it still points down, with space for greater falls.
In southern direction, a break in the psychological zone of 20.00 will point to 19.83, minimum of 2025 registered on April 3. Below this level, the USD/MXN can find support around 19.75, where are the floors of November.
Upwards, the first resistance zone between the mobile socks of 100 periods in daily graphic and one hour between 20.38 and 20.49. We would have to see a clear breakdown of these levels to see greater profits in the direction of last week at 21.08.
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.
