USD/MXN falls near 16.60 as the Mexican manufacturing sector maintains stability

  • The USD/MXN depreciates as growth in the Mexican manufacturing sector remains stable in March.
  • S&P Global's Mexico manufacturing PMI stood at 52.2 in March, virtually unchanged from the previous 52.3.
  • The US dollar could strengthen if traders revise their expectations for Fed rate cuts in June.

USD/MXN gives back its recent gains, depreciating to near 16.60 during the European session on Tuesday. The Mexican Peso (MXN) strengthens as growth in Mexico's manufacturing sector remains stable in March, contributing to the depreciation of the USD/MXN pair.

Furthermore, Mexican inflation has increased to 0.27% and 0.33% for the general and underlying measures, respectively, in the first half of March. This positive development has allowed the Bank of Mexico (Banxico) to maintain restrictive lending conditions as part of its efforts to address current inflationary pressures.

In March, the S&P Global Mexico manufacturing Purchasing Managers' Index (PMI) stood at 52.2, virtually unchanged from 52.3 in February. This means a continuous improvement in the health of the sector. Although the growth rate was moderate, it remained above its long-term trend.

Following Monday's positive United States (US) ISM Manufacturing PMI data, US Treasury yields saw a rebound, consequently limiting the decline in the USD/MXN pair.

The US ISM Manufacturing PMI revealed an unexpected expansion in March, with the index rising to 50.3 from 47.8 in February, beating expectations of 48.4. This index marked the highest level observed since the last decade. This reading marked the highest level seen since September 2022. Additionally, US ISM Paid Manufacturing Prices rose to 55.8 in March, surpassing both the expected reading of 52.6 and the previous reading of 52.5.

The US Dollar Index (DXY) maintains its bullish momentum, extending its winning streak for the fifth consecutive session and currently trading around 105.00. This favorable trend is attributed to traders revising their expectations for a quarter-point interest rate cut by the Federal Reserve during its June meeting.

USD/MXN

Panorama
Today's Latest Price 16.5815
Today's Daily Change -0.0318
Today's Daily Change % -0.19
Today's Daily Opening 16.6133
Trends
20 Daily SMA 16,734
SMA of 50 Daily 16.9593
SMA of 100 Daily 17.0492
SMA of 200 Daily 17.1969
Levels
Previous Daily High 16.6737
Previous Daily Low 16.5331
Previous Weekly High 16.7703
Previous Weekly Low 16.5116
Previous Monthly High 17.0655
Previous Monthly Low 16.5116
Daily Fibonacci 38.2% 16.62
Daily Fibonacci 61.8% 16.5868
Daily Pivot Point S1 16.5397
Daily Pivot Point S2 16.4661
Daily Pivot Point S3 16.3991
Daily Pivot Point R1 16.6803
Daily Pivot Point R2 16.7473
Daily Pivot Point R3 16.8209

Source: Fx Street

You may also like