- The USD/MXN falls to 20.16, a new minimum of six days, after Trump’s tariff announcement.
- The US president announces 25% tariffs to all foreign vehicles.
- Regarding reciprocal tariffs, all goods from Mexico and Canada that comply with the T-MEC free trade agreement are excluded.
The USD/MXN has registered a strong fall after knowing that Mexico was excluded from a part of the tariffs that the United States has announced in the last minute on Wednesday. The torque has fallen from the area from 20.48 to 20.16, marking a minimum of six days. At the time of writing, the par quotes over 20.18, losing 0.85% daily.
How do US tariffs affect Mexico?
The president of the United States, Donald Trump, appeared before the media at the White House, ensuring that on April 2 he will always be remembered as the day of the Renaissance of the US industry and the day the fate of the nation was recovered.
He has subsequently announced that from midnight a 25% tariff will be imposed on all cars made abroad. In the case of imported vehicles under the Free Trade Agreement between the US.
Regarding reciprocal tariffs, high rates have been established for China (34%), Japóa (24%) and the European Union (20%) and a 10%base tariff for a large number of countries, including the United Kingdom, Brazil and Chile.
Mexico is excluded from this tariff, since all goods that comply with the Free Trade Agreement T-MEC have been left out. Despite this exclusion, Trump has assured that he considers this treaty a disaster and will ask the Congress to end.
USD/MXN Price levels
The relative force index (RSI) of 14 remains below 50 in the short and long term, suggesting and greater falls in the horizon although there may be a small short -term correction. Down, a break in the 20.00 area will find support in 19.95, minimum last week. Below waiting 19.84, land of 2025 reached on March 14.
Upwards, the first resistance awaits at 20.38, mobile average of 100 periods in daily graphic. Above waiting 20.54, yesterday roof and higher level of the last four weeks. Above, the focus is at 20.99/21.00, Maximum of March and psychological zone, respectively.
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.
