- The USD/MXN rises to three days at 20.40.
- The US dollar weakens against most currencies for the fears of a recession in the US but records profits against Mexican peso.
- Jolts employment offers rise to 7,740,000 in January, above expectations.
- Donald Trump doubles tariffs on steel and aluminum from Canada to 50%.
The USD/MXN has fallen at a European noon to a minimum daily of 20.28 but in the opening of the American session it has rebounded to three days in 20.40. At the time of writing, the US dollar is quoted in front of the Mexican peso over 20.37, winning 0.07% in what we have been in time.
The US dollar collapses at a minimum of five months due to fears of the United States economy although it resists in front of the Mexican peso
The US dollar index (DXY) has fallen to 103.32, its lowest level since October 16. Among the reasons behind the fall stands out the trade war initiated by the president Donald Trump, who today has announced that he doubles the tariffs to Canada for steel and 50% aluminum from tomorrow March 12.
The other great fear of the market is that Trump’s measures can lead the country to an increase in inflation that makes it enter into recession, since many countries affected by tariffs will apply rates in turn on US products.
United States has published today the data of Jolts work and labor rotation offerswhich has shown that in January the job offers reached 7,740,000 from 7,508,000 views in December. The figure exceeds 7,630,000 offers expected by the market.
While in Mexico does not cease fears about a Trump posture change About tariffs, since yesterday he pointed out that those who are expected to be applied as of April 2 ‘could rise’. This uncertainty is weighing on the Mexican peso, weakening it against the dollar in recent hours.
The Mexican president, Claudia Sheinbaum, was more optimistic, and in a speech held yesterday in the Zocalo of Mexico City, she said she was confident that Trump did not impose reciprocal tariffs next month.
USD/MXN Price levels
To break above today in 20.40, the first resistance awaits in the 20.50 area, a roof of March 6. Above we could see a jump to the round level of 21.00.
In case of turning south, the first support is found in 20.18, yesterday soil and the last six and a half weeks. Below there will be an important obstacle in 20.13, minimum of 2025 registered on January 24. A rupture of this level would lead to the psychological zone of 20.00.
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.
