Mexican Bizo is vulnerable to Bancico

• Mexican peso spoils water and inflation figures indicate more mitigation by Pancico.
• Despite the low salaries of the United States, the low unemployment rate enhances the dollar against the peaso.
• Interest rate expectations indicate more mitigation in Mexico, while maintaining the Federal Reserve in a cautious look for 2025.

The Mexican Peso (MXN) reflected its path and ended against Greenback on Friday after justifying inflation data in Mexico, the fifty interest rate of points that Banco de Mexico (banxico) reduced on Thursday. In the United States (the United States), job data was mixed, as it was absent from salaries from the mark but the unemployment rate is lower. USD/MXN is traded at 20.60, an increase of 0.86 %.

Inflation in Mexico decreased in January, where the estimates revealed by the NACIONAL De ESTADISTAA Geographia E Informatica (INEGI). The main inflation and the basic inflation within the Bancico range remained 3 % plus or minus 1 %, improving compared to the latest report, and opening the door for more mitigation by the Mexican Central Bank.

On Thursday, Pancico reduced borrowing costs from 10 % to 9.50 % and hinted that they may reduce prices with the same size in additional meetings. Pancico officials added that inflation will approach 3 % in the third quarter of 2026.

The USD/MXN pair extended its gains after the release of the recent salary statements in the United States. Although the numbers were less than expectations, the improvement in the unemployment rate motivated the leg in the strange husband.

Moreover, the differential interest rate between Mexico and the United States will be narrowed. The primary reference rate is expected to decrease to 8.50 %, according to the Ccentral BBank Economic Economic Revenge. On the contrary, the Federal Reserve (Fed) stopped the mitigation cycle and expected price discounts in 2025, and the summary of economic expectations last December (SEP) revealed.

Digest Market Mark: progress in Mexican inflation, weighs on Mexican bizo

• The consumer price index (CPI) for January increased by 3.53 % year on an annual basis, a decrease from 4.21 % in the previous month and under 3.61 % estimates. CORE CPI increased by 3.66 % on an annual basis, an increase of 3.65 %, but less than expectations by 3.70 %.
• The development of the inflation process in Mexico and the economic shrinkage of the last quarter of the -0.6 % of QOQ the main motivations for the discount of Pancico 50 basis points in borrowing costs.
• Pancico’s decision was not unanimously, as Vice Governor Jonathan Heath voted to reduce 25 points per second. Currently, the plate is divided between four pipes, and Hayth is the only “falcon”.
• Non -agricultural salaries declined in January from 256 kilos to 143 thousand, and lost a mark of 170 thousand. The unemployment rate decreased from 4.1 % to 4 %.
• Commercial conflicts between the United States and Mexico remain in the boiler room. Although the two countries have found a common ground, US dollar traders/MXN should know that there is a temporary stop for 30 days and that tensions may arise throughout the end of February.
• Money market prices are the prices of 39 basis points (BPS) of mitigation with federal reserve solutions in 2025.

Technical expectations in US dollars/MXN: Mexican Peso is preparing for more losses

USD/MXN has been unified in the 20.30 – 20.70 region for the past four days, after a volatile Monday session due to Trump’s tariff on Mexico. The pair remains biased up, with strong support on a simple moving average for 50 days (SMA) at 20.57.

If the US dollar/MXN rises beyond 20.70, then the next resistance will be the daily peak on January 17 at 20.90 before testing 21.00 and at a year (YTD) at 21.29.

On the contrary, if the USD/MXN decreases to less than SMA for 50 days, the next support will be SMA 100 days at 20.22. Once removed, the negative side is seen, and the husband may challenge 20.00.