- USD/MXN falls as the US dollar weakens across the board.
- US Consumer Confidence improved but failed to support the dollar.
- USD/MXN Price Analysis: Still biased to the downside, but could turn neutral above 18.50.
He USD/MXN fell and extended its losses to a three-week low in early American session trading. US stocks are mixed while the Dollar continues to slide as market expectations of a 2023 rate cut persist. Thus, USD/MXN is trading at 18.2631 after hitting a high of 18.3573.
Consumer Confidence beat estimates, but the dollar was undeterred
Investor sentiment remains fragile. Economic data from the United States (US) was mixed, with Conference Board (CB) Consumer Confidence rising to 104.2 from 103.4 in February. “Built by a rebound in expectations, consumer confidence improved somewhat in March but remains below the median level seen in 2022,” said Ataman Ozyildirim, senior director of economics at the Conference Board.
Other survey data revealed that the Present Situation Index dropped from 153 to 151.1, and the Consumer Expectations Index rose from 70.4 to 74.
In early data, the House Price Index rose 0.2% month-on-month in January, versus an estimated 0.6% drop, data from the US Federal Housing Finance Agency showed on Tuesday. At the same time, the S&P/Case-Shiller home price index stood at 2.5% per year in January, up from 4.6% the previous month.
USD/MXN traders ignored most of the US data. The improvement in Consumer Confidence barely moved the pair, which continues to push lower, with sellers targeting 18.20. The Dollar Index (DXY), which measures the value of the dollar against a basket of currencies, falls 0.30% and stands at 102,518 points.
US Treasury yields are picking up some ground, with 2-year yields gaining four basis points, trading at 4,039%. The yield on 10-year Treasury bonds stands at 3,556%.
In Mexico, the lack of data keeps traders confident in sentiment and expectations of a 25 basis point rate hike by Banxico (Banco de México) on March 30. This would raise the rates from 11% to 11.25%.
USD/MN Technical Analysis
USD/MXN remains biased lower after briefly testing the 19.00 signal following the US banking crisis. The USD/MXN pair has since dipped below the 50 EMA and 20 days, setting the stage for a further decline. The Relative Strength Index (RSI) and the Rate of Change (RoC) suggest that sellers are gathering momentum. That being said, the first support for USD/MXN would be 18.0000, followed by the YTD low at 17.8967. In an alternate scenario, and the least likely to occur, if buyers recover 18.5000, that would exacerbate a rally to 19.0000.
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.
