- The USD/MXN approaches the minimum of six months reached yesterday in 19.58.
- The US dollar pauses its fall measured by its DXY index but remains widely weakened in the midst of the dispute between Donald Trump and the Fed for interest rates.
- The International Monetary Fund (IMF) reduces growth forecasts for Mexico and the United States in 2025.
The USD/MXN has opened Tuesday, testing a daily maximum in 19.75 and then falling into the American opening at its lowest level of the day in 19.59. The pair thus approaches the minimum of six months proven yesterday in 19.58.
At the time of writing, the US dollar is quoted in front of the Mexican peso over 19.64, losing 0.49% daily.
The US dollar pauses in its fall although it maintains the weakness of Trump’s confrontation with the Fed
The American dollar index (DXY) collapsed yesterday at least three years after Donald Trump would launch again against the president of the United States Federal Reserve, Jerome Powellaccusing him of a deceleration of the country’s economy for not wanting to cut interest rates.
The dollar measured by the DXY collapsed AA 97.91 after the comments, its lowest level since March 2022. Today, the index moves around 98.52, winning 0.16% daily, but continues widely affected by the fears of the market to a possible dismissal of Powell by the Trump administration.
The CME Group Fedwatch tool today gives only a 9.1% probability that the Fed cuts the rates in May, below 11.8% yesterday. For the June meeting, the options are at 71.4%, going down from 75.1% yesterday.
On the other hand, today the Richmond’s Fed Manufacturing Index, showing a 9 -point drop to -13 in APRIL since March 4. This is its lowest level in five months. It was expected that the manufacturing sector would fall to a lesser extent to -6 points.
Later in the day, the focus will be in the speeches of the members of the FED, Thomas Barkin and Neel Kashkari, who could offer clues about the federal reserve position regarding Trump’s words.
The International Monetary Fund reduces the growth forecasts of Mexico and the United States
The International Monetary Fund (IMF) announced in its updated report on the world economy perspectives on Tuesday that cut the global growth projections to 2.8% in 2025 and 3% in 2026 from 3.3% for both years of the previous forecast.
He IMF sees Mexico’s economy among the most affected and forecasts that 0.3% in 2025 will contractin front of the 1.4% growth forecast published in January.
HE It foresees that the growth of the US will slow 1.8% in 2025, a decrease of 0.9 percentage points compared to the January forecast of 2.7%.
Tomorrow, Mexico will publish its February retail sales data, while the US will announce the preliminary PMIs of services and manufactures for the month of April.
USD/MXN Price levels
The USD/MXN tendency is a short -term bassist, with the relative force index (RSI) of 14 showing space for more falls in the next few hours, also in major graphics.
If the descent continues below the minimum of yesterday in 19.58, the first support waits on 19.11/19.06, soils of October and September 2024. A break in the psychological zone of 19.00 could lead to the torque towards the surroundings of 18.40, where it is the minimum of August.
Upwards, the first resistance awaits in the mobile average of 100 periods in time graph, around 19.76. An upward breakdown of the region of 20.00 could lead to the torque to the mobile average of 100 in daily graph at 20.34.
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.
