- The Mexican Peso is advanced as USD/MXN drowns less than 19.90, a decrease of more than 1 %.
- The weak industrial bizo in Mexico and the low confidence of the consumer that nourishes the recession fears.
- The feelings of American consumers are drowning amid the growing inflation expectations, driven by the upcoming tariffs of the Trump administration.
On Friday, the Mexican Bezo gathered against the US dollar (US dollar), ignoring the most soft economic data that was revealed during the week indicating that the economy may slow down. The deterioration of consumer morale in the United States (the United States) escaped pressure on Greenback, which is preparing to end the week with losses. US dollar trading/MXN in 19.86, a decrease of more than 1 %.
The market mood turned into a prosperity and a taste for the emerging market currency. The bleak reports of consumer confidence and industrial production in Mexico draw a dark economic look, as confirmed by Panco de Mexico (Pancico), Director of Economic Research, Alejandrina Salisido Cesenrros.
She commented that uncertainty affects the country’s actions, which hints at a view of moderate expansion in regional economies. Pancico was estimated in economic shrinkage in all regions of the country. On the national level, the growth decreased by -0.6 % in the fourth quarter compared to the previous quarter in the seasonal numbers.
In the United States, the Consumer Morals Index at the University of Michigan (UOM) has scored a bleak print, while inflation expectations are aimed at the top due to US President Trump’s tariff.
The eyes of merchants in the Federal Reserve Policy Resolution (FERED) next week. Last Friday, Federal Reserve Chairman Jerome Powell revealed that “market measures for inflation expectations have risen, driven by definitions.”
Next week, traders will consider retail sales, housing data, monetary policy decisions at the Federal Reserve and Economic Expectations.
Digest Market Mark: Mexican Peso rises with weakening Greenback
- Industrial production in Mexico is drowned by -2.9 % on an annual basis, worse than December -2.7 % decrease, along with consumer’s deterioration that Mexican bizo can decrease despite the ongoing gains that were mostly observed due to the general weakness of the US dollar.
- The economy in Mexico slowly slows down as private sector analysts expected by Panco de Mexico (Pancico). They expect 0.81 % growth.
- Pancico is expected to continue to reduce politics at the March 27 meeting, which was accompanied by the development of the inflation and stagnant economy.
- On Wednesday, Mexican Finance Minister Edgar Amadur Zamora said that the national economy is expanding, but it shows signs of slowdown related to commercial tensions with the United States.
- A consumer feeling at the University of Michigan (UOM) showed that in March, feelings deteriorated from 64.7 to 57.9, less than 63.1 expectations. It is worth noting that inflation forecast jumped with Americans’ vision rising inflation for 12 months from 4.3 % to 4.9 %. Over a period of five years, consumers have seen 3.9 % prices, an increase of 3.5 %.
- Traders in the money market were priced at 67 basis points of mitigation by the end of the year at the end of the year, decreasing from 74 a day ago.
- A Reuters opinion poll showed that 70 out of 74 economists say that the risk of stagnation has risen in the United States, Canada and Mexico.
- In the boiler room, commercial conflicts between the United States and Mexico remain in the forefront and the center. If the two countries reach an agreement, it may pave the way for the recovery of the Mexican currency. Otherwise, more USD/MXN is seen because American definitions can lead to stagnation in Mexico.
Technical expectations in US dollars/MXN: Mexican Peso rises with the collapse of USD/MXN less than 20.00
Finally, USD/MXN cleared the number 20.00, reaching the lowest level in the fourth month in 19.84 earlier during the North American session. The momentum prefers the negative aspect of the husband as shown in the RSI index (RSI) turns into a decline and closes to the sales lands. Thus, the lower resistance path tends to the negative side.
The first support for the US dollar/MXN will be a simple moving average for 200 days (SMA) at 19.67. If it is crossed, the next station will be No. 19.50, before the fluctuation on September 18, 19.06. To resume an upper, the first roof level of the husband is 20.00. It will display a decisive SMA for 100 days at 20.35.
Common questions between Mexican Peso
The Mexican Bezo (MXN) is the most circulating currency among its peers in Latin America. 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 the levels of transfers sent by Mexicans who live abroad, especially in the United States. Geopolitical trends can also move MXN: for example, the proximity process – or the decision of some companies to transfer manufacturing capabilities and supply supply chains near their countries of origin – is a motivation for the Mexican currency as the country is a main manufacturing center in the American continent. Another MXN catalyst is oil prices because Mexico is a major source of commodity.
The main goal of the central bank in Mexico, also known as Pancico, is to maintain inflation at low and stable levels (in or near its 3 % target, the center point in the range of tolerance between 2 % and 4 %). To this end, the bank determines an appropriate level of interest rates. When inflation is very high, BancicPico will try to tame it by raising interest rates, making it more expensive for families and companies to borrow money, thus cooling demand and macroeconomic economy. The highest interest rates are generally positive for Mexican Peso (MXN) because it leads to higher returns, making the country a more attractive place for investors. On the contrary, low interest rates tend to weaken MXN.
The total economy data is a key to assessing the state of the economy and can have an impact on the Mexican PESO (MXN) evaluation. The strong Mexican economy, based on high economic growth, is a decrease in unemployment and high confidence, useful for MXN. It not only attracts more foreign investments, but may also encourage the Bank of Mexico to increase interest rates, especially if this force corresponds to high inflation. However, if economic data is weak, MXN is likely to decrease.
As a currency of the emerging market, the Mexican Biso (MXN) tends to strive during risk periods, or when investors see the wider market risk low and thus yearn to communicate with investments that bear greater risks. On the contrary, MXN tends to be weak in times of turmoil in the market or economic uncertainty where investors tend to sell high -risk assets and flee to the most resigned safe havens.
