- The USD/MXN rises 0.11% in the day visiting maximums of July 17 in 18,8369.
- The dollar index (DXY) rebounds 0.35% today, reading maximums of June 23 at 99.14.
- The US CB consumer trusted index increased to 97.2 in July.
- The Jolts employment offers in the United States fall to 7.43 million in June, below market estimates.
- The operators will be attentive tomorrow to the publication of the Gross Domestic Product of Mexico corresponding to the second quarter.
The USD/MXN marked a minimum of the day at 18,7267, finding aggressive buyers who brought parity to maximums not seen since July 17 in 18,8369. Currently, the USD/MXN operates over 18,7910, moving 0.15% on Tuesday.
The Mexican weight quotes downwards after the United States key data
According to the information published by the US Board Conference, the consumer confidence rate increased to 97.2 points in July from 95.2 points observed the previous month.
On the other hand, US Jolts employment offers registered a decrease at 7,437 million, standing below 7.55 expected and 7,771 million observed in the previous month.
In this sense, the dollar index (DXY) records a gain of 0.35% in the day, visiting maximum of June 23 in 99.14, signing its fourth consecutive day on the rise.
The Mexican weight operates in the loss zone per second consecutive session, while the USD/MXN advances 0.15% daily, reaching maximums of July 17 in 18,8369.
USD/MXN Price levels
The USD/MXN formed a short -term support in 18.51, minimum of July 28. Upwards, the closest resistance is observed in 18.88, maximum of July 15. The next key resistance zone is in 19.14, maximum of June 23.
USD/MXN daily graphics
Mexican peso – frequent questions
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.
