The Mexican bizo continues to climb, and moves for six days in the midst of closed American markets
- USD/MXN drops below 50 days of SMA at 20.42, trading in 20.27.
- Retail sales in the weak United States and the most fueled PPI fuel feeds expectations that reduce.
- Focus on retail sales in Mexico, Banxico Motor, and Q4 GDP this week.
Mexican Mexican (MXN) has extended its gains against the US dollar (USD), which wipes the main support on a simple moving average for 50 days (SMA) 20.42, where USD/MXN found admission to low exchange rates. At the time of writing this report, the strange pair is trading at 20.27, a decrease of 0.09 %.
Last week, retail sales report in the United States (United States) led to a decrease in the MXN dollar pair amid uncertainty about economic growth in the United States.
Although consumer enlargement data in the United States increased, some of the sub -product price index (PPI) used to calculate the preferred inflation scale in the field of federal reserve Decrease, increased Fed reduction opportunities.
After Friday data, the Chicot Commercial Council numbers indicate that investors have 43 basis points (BPS) of mitigation.
Nevertheless, the Federal Reserve Chairman in Philadelphia Patrick Harker stated that the current situation of the economy justifies maintaining a fixed average policy, noting that monetary policy is now good. He acknowledged that inflation has remained high and continuous in recent months, stressing that the federal reserve policy position should continue to reduce inflation.
Before this week, the Mexico’s economic list will include retail sales for December, the latest Banco De Mexico (banxico) meeting, and the total local products of Q4 2024.
Daily Digest Market Movers: Mexican Bzo climbing despite Pancico Duvish’s position
- The difference in monetary policy between Pancico and Favors is more than the upper trend of the US dollar (MXN), as the Federal Reserve is likely to maintain rates for a longer period, while Pancico is expected to reduce prices again by 50 basis points at the next meeting.
- The US dollar index (DXY), which tracks Pak’s performance against a currency basket, has not already changed at 106.77, a opposite wind for USD/MXN.
- 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 in US dollars/MXN: Mexican Peso is increasing as USD/MXN decreases to less than 50 days of SMA
US dollar trends/MXN are lower on Monday and close to SMA for 100 days in 20.24, which, if wiping it, can open the door to more negative aspect. The RSI has turned into a decline, which indicated that the strange husband can turn to the psychological number 20.00.
In this result, if the sellers are paid to less than 20.00, then the next support will be swinging on October 18 at 19.64, followed by SMA for 200 days in 19.37.
On the contrary, if the US dollar/MXN rises over SMA for 50 days, the following resistance will be 20.50, followed by the highest level on January 17 of 20.90, number 21.00, and at a year (YTD) from 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 an incentive 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 inductive safe havens.
