- The Mexican Peso is estimated, ignoring the position of Pancico Duvish, and a weaker economic outlook.
- Retail sales in Mexico in December exceed estimates but slow from the previous month.
- Pancico minutes reaffirm the Dovish position, highlighting the progress of inflation.
- The final Q4 GDP is expected to confirm the economic slowdown on Friday.
Mexican bizo systems, Odeh, rose more than 0.23 % against Greenback. Retail sales in December exceeded estimates, however it was delayed compared to the numbers of the previous month. USD/MXN is traded at 20.39 after reaching the highest level of 20.46.
Mexico’s economic list revealed that consumers’ spending has decreased compared to November data, but has exceeded the expectations of the pessimists of private economists. Meanwhile, Panco de Mexico (Pancico) revealed the last minutes of its meeting, reaffirmed the position of the Mexican Foundation, and suggested that greater price discounts be made.
On Wednesday, Pancico revealed its semester report of the Q4 2024, where the central bank reviewed its growth expectations in 2025. Moreover, the bank expects the weakest consumption and special spending, which reflects the very unconfirmed environment.
Regarding the reduction of the 50Basis-Point rate in the last decision of monetary policy, the Board of Directors ruled out that they are comfortable with current inflation levels. The most prominent progress of the corrosion.
On Friday, Instituto Nacional De Estadistica Geographia E Informatica (INEGI) will include reading the final GDP of Q4 2024, which is expected to show a quarterly contraction and is expected to expand annually.
Daily Digest Market Movers: Mexican Bizzo Climbing, not annoyed by the weakest economic expectations
- The last minutes in Bansiko confessed that the risk of growth tends to the negative side. The Board of Directors expects the economy to grow 0.6 % in 2025, a decrease from 1.2 % previously. Expectations are much lower than the Ministry of Finance in Mexico by 2.3 % and under the investigation of CITI by 1 %.
- For 2026, Pancico is estimated that Mexico’s economy will expand by 1.8 %.
- Retail sales in Mexico increased by 0.1 %, above estimates by -0.4 % of contraction. On an annual basis, sales improved from contraction -1.9 % to -0.2 % on an annual basis.
- Mexico President Claudia Shinbom said that Marcelo Eftrard, the Mexican Minister of Economy, will meet with the US Secretary of Commerce today about the customs tariff.
- The monetary policy between Pancico and Favors is more than USD/MXN. The Federal Reserve is expected to maintain fixed rates, while Pancico is expected to reduce the reduction rates again by 50 basis points at the next meeting.
- USD/MXN is advanced due to the weakness in Greenback. The US dollar index (DXY) decreased 0.65 % to 106.45.
- Commercial conflicts between the United States and Mexico remain in the forefront and the center. Although countries have previously found a common ground, USD/MXN merchants 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 bizo is fixed because USD/MXN is less than 50 days of SMA
USD/MXN continued to integrate it without the simple moving average for 50 days (SMA), while keeping the bulls in the examination. More twice the exchange rate can be paid to less than 100 days SMA at 20.22 and threatens the challenge of the psychological number 20.00. If it is wiped, the next support will be on October 18, 2024 low at 19.64, before SMA for 200 days at 19.37.
On the contrary, if the US dollar/MXN enlarges after SMA for 50 days, then the additional gains lie on the brand 20.50.
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 resigned safe havens.
