- ANDL USD/MXN is quoted in a narrow range around 19.00/19.07.
- The US dollar falls to a minimum of two days due to some improvement in the feeling in the markets.
- Donald Trump gives two weeks of time to decide whether he intervenes in Iran.
- Next week it will be key to the Mexican weight, focus on the decision of interest rates of Banxico.
The USD/MXN went up yesterday to a maximum of eleven days in 19.11, closing the day in positive around 19.03. This Friday, the torque is consolidated in a narrow rank located between the 19.00 and 19.07 zone, showing practically flat in the day.
The US dollar loses impulse after knowing that Donald Trump will take two weeks to decide if he intervenes in Iran
The US dollar index (DXY) weakens this Friday, going back to a minimum of two days at 98.60 after the market woke up with better mood after knowing that Donald Trump will take two weeks of time to decide if he intervenes in Iran.
White House spokeswoman, Karoline Leavitt, was in charge of issuing the following message from the US president. “I have a message from the president: based on the fact that there is the possibility of substantial negotiations with Iran in the near future, I will make a decision on whether or not to go in the next two weeks.” The information generated relief in the markets, which this Friday has awakened with a better tone, as reflected in European stock exchanges, which record profits in their main indexes at the time of writing.
Mexico prepares for an incoming week full of data
A few hours after the weekly closure, the view of the Mexican peso operators will be set in the next week, since Mexico will publish several key data.
Monday will begin with the publication of April Retail Sales, after showing growth in March of 4.3% per year. On Tuesday will continue with the first half of June inflation, a relevant fact for the great event on Thursday, the Banxico’s interest rates decision. The Mexican Central Bank cut its rates at 50 basic points at the last meeting, held in May. By June, the market expects another 0.5%cut, that would place interest rates in 8%. Finally, on Friday it will be the turn of the May unemployment rate, expected data after the rise from April to 2.5% from the previous 2.2%.
USD/MXN Price levels
The USD/MXN trend is short -term neutral this Fridayalthough it remains bassist in the medium and long term. The relative force index (RSI) of 14 is around 45 in the hour graph, pointing slightly upwards, which suggests consolidation in the current price zone.
Downwards, the first support is located in 18.99, where is the 100 -hour -graphic mobile average. Below, the USD/MXN will find a retaining wall in 18.82, land of 2025 and the last ten months reached on June 16. A rupture of this level would point to the 18.60 zone, where the minimums of the end of August are.
In the north direction, a rupture of the maximum of the week in 19.11 could lead to a rise to the alreders of 19.43/19.44, where are the final of May and the beginning of June. Above, the goal is in 19.78, a roof last month.
1 hour graph of USD/MXN
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.
