- The Mexican peso wins 0.53% despite the weak Mexican data, supported by the general weakness of the USD after the gloomy US data.
- The markets now value 79 bp of feat cuts from the Fed by the end of 2025, adding pressure to the dollar.
- Attentive to Trump preparing to reveal new tariffs; The gross fixed investment data also in the focus.
The Mexican weight (MXN) recovers land on Tuesday while operators prepare for the “Liberation Day” on Wednesday, when the president of the United States (USA), Donald Trump, announce additional tariffs aimed at reducing the commercial deficit is expected. Previously, US economic data painted a gloomy economic scene, which weighed on the dollar, as reflected in the USD/MXN torque that quotes to 20.35, lowering 0.53%.
The economic agenda of Mexico revealed that business confidence deteriorated in March, according to the National Institute of Geography and Informatics Statistics (INEGI). Other Global S&P data reported that manufacturing activity contracted for ninth consecutive month, reaching its lowest level in three years.
Although the data suggests that Mexico’s economy is slowing down, the peso benefits from the general weakness of the US dollar (USD), before Trump’s announcement on Wednesday.
Meanwhile, the dollar weakened due to a weaker ism manufacturing PMI of what was expected in March, along with a fall in labor vacancies, as revealed by the report of the Employment and Labor Rotation Offers (Jolts) of February.
After the publication of the data, the market participants began to value 79 basic points (PB) of relaxation by the Federal Reserve (FED) towards the end of 2025.
This week, Mexico’s economic agenda will include gross fixed investment data. In the US, the operators focus on the announcement of Trump tariffs, the ISM services PMI for March, the non -agricultural payroll figures and the speech of the president of the FED, Jerome Powell.
This week, the Mexican economic calendar will present business confidence, the Global S&P manufacturing PMI and gross fixed investment figures.
What moves the market today: the Mexican peso is recovered while the US dollar weakens
- The business confidence of Mexico in February deteriorated drastically, according to INEGI. Trust fell to 49.9, from 50.4 in February, indicating that companies are becoming more and more pessimistic about the economy, this being its lowest level since May 2021.
- The Global S&P manufacturing PMI of Mexico remained in contraction territory for ninth consecutive month, in 46.5, which is worse than February 47.6.
- The USM ISM manufacturing PMI collapsed from 50.3 to 49 in March. The survey comments suggest that tariffs are the main engine in most index subcomponents.
- Jolts data reported by the US Department of Labor revealed that vacancies decreased in February but remained close to the previous level, according to the publication. The figures were 7,568 million, falling from 7,762 million and below the estimate of 7.63 million.
- In the US, S&P global revealed that the manufacturing activity expanded, with the PMI rising from 49.8 to 50.2.
- The governor of Banxico, Victoria RodrÃguez Ceja, declared that the Central Bank will remain attentive to US commercial policies and its impact on the country, with a main approach to inflation, as noted in an interview with El Financiero.
- JP Morgan supports an additional 50 bp cut due to the risks of an imminent recession, according to the analyst Steven Palacio del Banco.
- “It is inevitable that Mexico passes through a recession because the tariffs and uncertainty surrounding its implementation occur in an economic context that was already in strong decline,” Palacio said.
Technical Perspective of the USD/MXN: The Mexican weight advances while the USD/MXN falls below 20.40
The upward trend in USD/MXN remains intact despite the fact that the torque fell to the confluence of simple mobile socks (SMA) of 100 and 50 days about 20.35/36. The momentum remains bullish, but in the short term, the relative force index (RSI) points down, indicating that sellers are gaining impulse.
If the USD/MXN falls below 20.30, the following support would be 20.00, followed by the 200 -day SMA in 19.75. On the other hand, if buyers recover 20.50, the next resistance would be the peak of March 4, 20.99, followed by the maximum of the year to date (YTD) of 21.28.
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.
