- The USD/MXN remains plane about 19.58 while the weak Mexican manufacturing and Banxico dovo bias weigh against the solid US employment data.
- The discouraging data from Mexico suggest that the economic slowdown could continue as the PMI reaches a minimum of three years and business confidence deteriorates.
- Banxico is expected to cut rates in May, expanding the policy gap with the Fed and pressing the perspectives of the weight.
The Mexican peso (MXN) remained firm against the US dollar (USD), although it is prepared to end the week with losses of more than 0.40% after the economic data revealed in Mexico painted a gloomy economic panorama, despite the fact that the economy grew surprisingly in the first quarter of 2025. In addition, the solid employment data of US They kept USD/MXN near the 19.58 mark practically unchanged.
Mexico’s economic agenda revealed that business confidence deteriorated for the third consecutive month in April. At the same time, S&P Global revealed that the manufacturing activity for the same period collapsed to its lowest level in three years, containing for the fourth consecutive month according to the manufacturing PMI index.
On the other side of the border, the positive commercial news between the US and China limited the USD/MXN torque profits while the US dollar recorded some losses. In the data front, the non -agricultural payrolls of April exceeded the estimates and were lower than the previous reading. Along with this, the unemployment rate remained stable, highlighting the robustness of the US labor market.
The Federal Reserve (Fed) is expected to maintain the rates without changes in the meeting next week. On the contrary, the Bank of Mexico (Banxico) has indicated its intentions to continue flexible monetary policy at its May meeting to support the economy, despite the fact that inflation has not reached the objective of 3%. Therefore, the divergence between both central banks could press to the peso and improve the prospects of the US dollar.
What moves the market today: the Mexican weight is not allowed to be affected by the bad data
- Business confidence in Mexico in April was 48.5, lowering 49.7 revealed by the National Institute of Geography and Informatics Statistics (INEGI). This and the contraction of the Global S&P manufacturing PMI for the same period, which fell from 46.5 to 44.8, suggests that the future economic landscape looks worse than expected.
- Although the last figures of the Gross Domestic Product (GDP) surprised the markets, showing that the economy grew, tariffs imposed on Mexican products, together with the reduction of the budget, would remain stressed to the country’s financial sector.
- The US non -agricultural payrolls (NFP) increased by 177K in April, exceeding 130k expectations, although slightly below the 185K reviewed downward. The strongest figure than expected contrasted with the weakest ADP employment report at the beginning of the week, which suggested a slower hiring impulse.
- The unemployment rate remained stable at 4.2%, in line with forecasts. Stable labor data can give the Federal Reserve reasons to maintain policy without changes in the short term.
Technical Perspective of the USD/MXN: The Mexican weight is still bullish while the USD/MXN is maintained below the 200 -day SMA
The downward trend of the USD/MXN remains, although the recent price action suggests a possible fund around the range of 19.46–19.50. The relative force index (RSI) remains plane near level 30, indicating an exhaustion of sellers.
A fall below the minimum of the year to date in 19.46 would exhibit the psychological level of 19.00, and greater weakness could lead to a maximum June 28 test converted into a support in 18.59.
On the other hand, a movement above the 20 -day SMA in 19.88 and the 200 -day SMA about 19.97 would change the momentum in favor of buyers, opening the door to recover the 20.00 mark, followed by the 50 -day SMA in 20.12.
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.
