- The USD/MXN re -tested at least ten months in 18.82.
- The US dollar falls to a minimum of the day after the disappointing data of the June Manufacturing Empire index.
- Tensions in the Middle East and manifestations against Trump’s immigration policy in the US favor the Mexican peso against a weakened dollar.
The USD/MXN has begun the week testing a daily maximum in 18.97, but little by little it has been losing ground, falling again to a minimum of 2025 reached last Wednesday in 18.82 after the American opening. At the time of writing, the par is quoted over 18.84, losing 0.63% in what we have been working on.
The US dollar accumulates reasons to depreciate
The dollar index (DXY) falls again on Monday after the pause of Friday post attack by Israel to Iran that originated a rebound in the green ticket. The DXY has fallen in the last hours to a minimum daily at 97.68, caused by several factors.
The most pronounced decrease in the dollar has occurred before the American opening, after knowing that the Manufacturing Empire Index of the Fed in New York has fallen to -16 points in June From May 9.2, registering its lowest level since March and disappointing the expectations of improvement to -5.5 points. The weak American fact has been joined by the statement of BenjamÃn Netanyahu, who according to Reuters, has indicated that they were asking Tehran citizens to evacue the city.
To this panorama, the softization of American inflation is added, which last week showed that it grew less than expected in May, weighing on the dollar. The Fed will announce your interest rate decision this Wednesdayand although everything indicates that it will not move its interest rates, the event will be of maximum interest since the focus will move to the points graph, the projections that the entity performs every three months. A significant change in the Federal Reserve forecasts regarding the points graph published in March could cause considerable movement of the USD.
The meeting between Donald Trump and Claudia Sheimbaun mark the week after antimigration protests in the United States
The Mexican weight, meanwhile, is benefiting from the drift of Donald Trump’s policy, both in the migratory front and in the tariff.
He Saturday, thousands of people demonstrated in the United States to protest against Donald Trump’s immigration policy and its massive raids. Los Angeles, Seattle and New York registered the most important demonstrations among the almost 2,000 cities where protests were carried out, with a large volume of Mexican citizens affected by these operations. The pressure on the US president is increasingly greater, since its policies directly affect the economy of the country, which can lose irreplaceable labor in key sectors such as services and agriculture. In this sense, the Republican Administration communicated last Thursday to pause the raids against immigrants both in the hospitality and in the agricultural sector.
The focus now turns to the G7 summit, since the First face -to -face meeting between the Mexican president, Claudia Sheinbaum, and her American counterpart Donald Trump. The meeting is scheduled for tomorrow, June 17and during the estimated time, issues related to migration and tariffs are expected to be prioritized. The Mexican president has pledged to defend the rights of Mexican migrants, pointing out that Mexicans living in the US contribute to the economic growth of the country.
USD/MXN Price levels
With the trend pointing to the decrease in temporalities of short, medium and long term, the relative force index (RSI) of 14 begins to show that the USD/MXN is oversight in the daily chart, so we could see a brief correction of the pair in the next few hours.
Downwards, a support of the support located at a minimum of ten months in 18.82 could cause a downward movement in the direction of 18.60 first, where the minimums of mid and late August are, and 18.40, which served as containment in the last days of July. Below 18.00, the USD/MXN could fall to 17.60, soil of the last twelve months.
Upwards, the crossing would have to overcome the mobile average of 100 periods in time graph located in 18.96 to extend its upward movement around 19.10, maximum of last week.
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.
