- The USD/MXN falls 0.02% today, oscillating within the range of the previous session at 19.0414.
- The dollar (DXY) index earns 0.04% daily, while markets remain attentive to the evolution of negotiations between the US and China.
- The economic agenda contemplates the consumer price index of the United States, to be released tomorrow.
The USD/MXN established a maximum of the day on 19,0989, attracting vendors that dragged parity to a daily minimum on 19.03. Currently, the USD/MXN is traded on 19,0414, losing 0.02% on Tuesday.
The Mexican weight is consolidated at nine months
In the midst of a context in which commercial negotiations between the United States and China take the center of the stage, the dollar index (DXY) has a daily gain of 0.04%, rising from a minimum of the day in 99.38 to a daily maximum in 99.38, consolidating within the operating range of June 9 in 99.03. If a commercial agreement could increase the demand of the US dollar, increasing the appetite of risk of investors.
In this context, the Mexican weight spin its fifth consecutive days with profits, while the USD/MXN loses 0.02% today, staying close to a minimum of August 2024.
The focus of the operators will be placed in the United States consumer price index, to be published on Wednesday. The market consensus awaits a slight increase to 2.5% in May, compared to 2 3% registered in April
On the other hand, the National Institute of Statistics and Geography of Mexico (INEGI) will announce the industrial production corresponding to the month of April, which obtained a growth of 1.09% in March.
USD/MXN Price levels
The USD/MXN reacted down from a short -term resistance given by the maximum of June 6 in 19.22. The next key resistance is observed in 19.28, maximum of June 3 in convergence with 61 8% fibonacci. To the south, the important support is located in 18.59, pivot point of August 16, 2024.
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.
