- Mexican Bizo is appointed to more than 1 % per week with the US dollar drop.
- The US dollar index decreases to its lowest levels with increased bets in the Federal Reserve rate
- It fears the decrease in retail sales in the United States, which enhances expectations that aim to reduce the federal reserve to 43.5 basis points.
- Focus on the Banxico Lectures, GDP Mexico, and retail sales next week.
The Mexican Bezo (MXN) has been collected on Friday, scheduled for the week with gains more than 1 % against Greenback. The worse retail sales report from expected in the US dollar (US dollar) has declined to its lowest level, one year to another, as shown in the US dollar index (DXY). The USD/MXN pair is trading in 20.32, a decrease of 0.39 %.
The economic data of the United States (the United States), which was previously unveiled, was the main engine of the session after investors ignored the mutual definitions that US President Donald Trump has not yet published. However, the diligent retail sales report in January may increase the chances of deeper economic slowdown in the United States.
This highlights that Americans reduce spending due to high interest rates. From now on, investors have begun in 43.5 basis points of mitigation by Federal Reserve (Fed), according to data from the Chicot Board of Commerce (CBOT).
The Federal Reserve revealed that industrial production improved in January, failed to stop Greenback during the North American session.
In Mexico, the list was empty yet. Next week, US dollar traders/MXN will see the release of retail sales, Banco de Mexico (banxico) Monetary MONETARY MONETARY MONETARY MONETARY MONETARY MONETARY MONETARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MONTARY MOSTERES and total local products numbers (GDP) for Q4 2024.
Daily Digest Market Movers: Peso Mexican rises when Greenback is beaten
- The deterioration in the auto industry in Mexico and the possibility of the United States to apply to cars can affect the Mexican economy, which is expected to show a shrinkage in the last quarter of 2024.
- The monetary policy between Pancico and Favors Touch USD/MXN is the rise, as the Federal Reserve is likely to retain rates unchanged. Meanwhile, Pancico aims to reduce the rate of 50 Basis points at the next meeting.
- The US dollar index (DXY), which tracks Pak’s performance against the currency basket, from 107.12 to 106.68, is another reason for the negative aspect of the US dollar/MXN.
- On Thursday, US President Donald Trump commissioned his economic team to develop plans for mutual tariffs on each country that imposes taxes on US imports.
- Retail sales in the United States decreased sharply by -0.9 % of my mother in January, and expectations were lost significantly by -0.1 % and disappointing investors. However, the December number has been revised to an increase of 0.7 %.
- Meanwhile, industrial production expanded by 0.5 % of my mother in January, a decrease from 1 % growth in December, but the economists’ expectations exceeded 0.3 %.
- Commercial conflicts between the United States and Mexico remain in the boiler room. Although countries have previously found a common ground, US dollar traders/MXN should know that there is a temporary stop for 30 days and that tensions may arise at the end of February.
Technical expectations USD/MXN: Mexican Peso rises with the decline in the US dollar/MXN to less than 20.50
USD/MXN decreased to less than the simple moving average for 50 days (SMA) of 20.45, which cleared the path to test an area of ​​20.25 before SMA 100 days at 20.23. Negative additions lies as soon as sellers exceed these levels, with the psychological number 20.00. It should be noted that the losses can push the strange husband towards SMA for 200 days in 19.35.
On the contrary, if buyers want to restore control, they must wipe the main resistance levels such as the highest level on January 17 at 20.90, number 21.00, and at the year (YTD) of 21.29.
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 the manufacturing capacity and supply supply chains near its countries of origin – is a motivation for the Mexican currency as the country is the 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.
