- The USD/MXN loses 0.60% daily, reaching minimal not seen since August 21, 2024.
- The dollar index (DXY) goes back 0.31% in the day, reaching minimum of June 5.
- The United States consumption price index (CPI) is 2.4% per year in May, improving market forecasts.
- The National Institute of Statistics and Geography of Mexico (INEGI) announced the decrease of 4% interannual in industrial production.
The USD/MXN reacted down from a daily maximum on 19.07, where it found aggressive vendors that led to minimal parity not seen since August 21, 2024 in 18.93. At the time of writing, the USD/MXN operates over 18.94 falling 0.60% on Wednesday.
The Mexican peso shoots after an iPc of the United States better to the expected
Based on information provided by the United States Labor Statistics Office, the interannual consumer price index (CPI) rose 2.4% in May, above 2.3% observed in April and improving market expectations of 2.5%. At the same time, the underlying IPC, which excludes food and energy increased by 2.8% in May equalizing the April increase.
After this result, the dollar index (DXY) slides 0.41% today, visiting minimal not seen since June 5 at 98.58.
On the other hand, the National Institute of Statistics and Geography of Mexico (INEGI) announced the contraction of 4% year -on -year in the industrial production of April, reaching levels not seen since February 2021 and located well below the rise of 1.9% observed in March.
In this sense, the Mexican peso shoots at maximum of almost 10 months, while the USD/MXN falls 0.60% on Wednesday, reaching minimums not seen since August 21, 2024 in 18.93.
USD/MXN Price levels
The USD/MXN reacted down from a short -term resistance given by the maximum of June 10 on 19.09. The next key resistance is observed in 19.18, maximum of June 5 in convergence with the recoil at 78.6% of Fibonacci. Downwards, the important support is found 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.
