Mexican Peso Trims Losses but Still Set for Over 2% Weekly Decline: USD/MXN Analysis

The Mexican Peso has seen a slight recovery against the US Dollar on Friday, but it is still on track to end the week with over a 2% loss. The US PCE Price Index, a key inflation measure, indicates steady inflation, fueling expectations of a Fed rate cut. Talks of judiciary reform in Mexico starting on August 1 have raised economic and political concerns.

Wall Street’s gains have influenced the USD/MXN pair, with the Peso making modest gains against the weakening Dollar. Inflation data in the US shows signs of stability, prompting speculation that the Fed may ease policy in September. The CME FedWatch Tool shows a 100% chance of a rate cut in the upcoming meeting.

Despite positive Consumer Sentiment data and stable inflation expectations, the Mexican Peso remains resilient amid reform talks. Analysts predict challenges for the Bank of Mexico due to potential second-round effects on inflation and economic growth projections for Mexico.

Technical Analysis: Mexican Peso Strengthens, but USD/MXN Uptrend Persists

The USD/MXN pair remains biased towards an uptrend, despite recent Peso gains. Momentum favors bulls, with potential resistance levels at 18.50, 18.99, and 19.23. Support levels are at 18.00, 17.74, and 17.58.

Overall, economic indicators and market trends suggest a complex landscape for the Mexican Peso, influenced by domestic and global factors. Investors should monitor key data releases and policy decisions to navigate potential risks and opportunities in the currency market.

Shares: