The Mexican Peso (MXN) showed resilience on Friday, maintaining its position against the US Dollar despite a slight increase. The positive sentiment among US consumers, as indicated by the University of Michigan’s Consumer Sentiment Index, led to a boost in market risk appetite, causing a decline in the value of the Greenback as investors turned to riskier assets.
Looking ahead, Mexico’s economic calendar for the upcoming week is relatively quiet, with all eyes on the start of the Jackson Hole Economic Symposium later in the week.
Key Market Movements: Mexican Peso Seeks Gains Amidst Fragile Momentum
- The University of Michigan’s Consumer Sentiment Index rose to 67.8 in August, surpassing expectations and boosting market sentiment.
- Consumer 5-year Inflation Expectations remained steady at 3.0% in August.
- The upcoming Jackson Hole Symposium is expected to feature appearances from central bank policymakers.
Mexican Peso Outlook: Bulls Face Challenges Despite Recent Gains
The Mexican Peso has made significant gains against the US Dollar, but there is still ground to cover before it can be considered on balance. Despite the recent climb, the Peso is still down over 14% from its peak in 2024, indicating a long road ahead for Peso buyers.
While the USD/MXN pair has been trading in favor of the Peso, it continues to hover above the 50-day Exponential Moving Average (EMA) at 18.34. Additionally, a pattern of higher lows suggests that Greenback shorts are not yet ready to give up.
USD/MXN Daily Chart
Economic Indicator: Michigan Consumer Sentiment Index
The Michigan Consumer Sentiment Index, released monthly by the University of Michigan, provides insights into consumer sentiment in the US. The index covers personal finances, business conditions, and buying conditions, offering a snapshot of consumer willingness to spend, a crucial driver of the US economy. A high reading is typically bullish for the US Dollar, while a low reading is bearish.
Last Release: Fri Aug 16, 2024 14:00 (Prel)
Actual: 67.8
Consensus: 66.9
Previous: 66.4
Overall, the Mexican Peso’s performance against the US Dollar is influenced by consumer sentiment, economic indicators, and market sentiment. For investors, staying informed about these factors can help make more informed decisions about currency trades and financial strategies.