- The USD/MXN falls to 20.10, its lowest level in eleven weeks.
- The US dollar fails to rebound against Mexican peso, although against its main rivals.
- The inflation of the production prices of the United States is moderate more than expected in February.
- Mexico will wait for April 2 to respond to tariffs imposed by Donald Trump.
The USD/MXN has fallen in the last hours from the European morning daily maximum in 20.20 to 20.10, its lowest level in what we have been in 2025. At the time of writing, the US dollar is quoted in front of the Mexican weight over 20.11, losing 0.34% in what we have on Thursday.
The US dollar rebounds against the main currencies but yields land before the Mexican peso
The US dollar index (DXY) is replacing this Thursday, rising to 104.08, maximum of six days, despite the moderation of the inflation of the production prices of the United States.
He US Production Price Index (IPP) increased 3.2% per year in Februarybelow the increase of 3.7% of January and the expectation of the market of 3.3%. The underlying IPP, which excludes food and energy, increased 3.4% in the same period, lowering 3.8% in January, and below the estimated 3.5%.
The main reason for the rebound seen today in the dollar is the Descent of the probabilities of a Fed feat cut in May. According to the CME Group Fedwatch tool, type reduction options are 28.9%, below 33.7% yesterday. For June, the possibilities of a cut are located at 76.2% compared to 80.7% yesterday.
Mexico will wait for April 2 to respond to Trump’s tariffs
The president of Mexico, Claudia Sheinbaum said yesterday that “we are going to wait for April 2 to take a definitive solution on whether steel and aluminum reciprocal tariffs are placed”. The president has the hope of reaching an agreement with the United States to eliminate steel and aluminum levies. The Secretaries of Finance and Economics of Mexico plan to hold meetings with their counterparts in Washington in the next few days in order to get the withdrawal of these taxes. The wait in Mexico’s response makes the market believe that negotiations are on the right track, favoring Mexican weight.
On the other hand, Mexico has published today its data from January industrial production. The indicator fell 2.9% annually in January after having declined 2.7% in December, worsening market expectations, since a 1.8% drop was expected. At the monthly level, industrial production decreased 0.4% after falling 1.4% the previous month. The figure disappoints the +0.2% provided by consensus.
USD/MXN Price levels
The relative force index (RSI) shows that the pair is oversight in time graph, although in the newspaper it still has space for more losses. In case of extending the fall, the psychological zone of 20.00 will exercise strong support. Below, the USD/MXN can fall around 19.75/19.76, where the minimum of November 2024 are.
Upwards, the first resistance awaits at 20.38, mobile average of 100 periods in daily graphic. Above, the objective will be in 20.50, maximum of March 6. A rupture above this level will point to the 21.00 zone.
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.
