The Mexican Peso faced a decline against the US Dollar on Wednesday as the lower house in Mexico approved President AMLO’s bill for judicial reform. The USD/MXN pair traded at 19.85, marking a 0.30% increase.
Despite opposition, the bill passed with 357 votes in favor and 130 against in the Chamber of Deputies. Now, it awaits Senate approval, with concerns raised by foreign governments and international companies over its impact on the rule of law.
While the US JOLTS report showed a decline in job openings, the USD/MXN remained range-bound between 19.67 and 19.92. Speculation about a potential 50 bps rate cut by the Fed in September added to market uncertainty.
Key Market Updates: Mexican Peso Faces Challenges Amid Sparse Economic Data
- Recent data from Mexico indicates economic slowdown, partly due to higher interest rates set by the Bank of Mexico.
- Unemployment rate edged closer to 3%, while manufacturing sector activity decreased.
- Upcoming releases include data on Mexico’s automobile industry and inflation figures.
- Expectations of rate cuts by Banxico could further pressure the Peso, which has already depreciated by 17.38% YTD.
Technical Analysis: USD/MXN Strengthens Above 19.85
The USD/MXN pair rallied above 19.85 following political developments, with resistance levels at 20.00 and 20.22. On the downside, support lies at 19.50 and 19.02, with potential further weakness towards the 50-day SMA at 18.65.
Analysis Breakdown:
The Mexican Peso is facing challenges due to political turmoil and economic uncertainty. Approval of the judicial reform bill has raised concerns among foreign investors and led to a decline in the Peso’s value against the US Dollar. The upcoming Senate decision and potential Fed rate cuts add to the market’s uncertainty. Economic data releases from Mexico highlight the country’s slowing economy, with expectations of further rate cuts by Banxico. Technical analysis suggests a strengthening USD/MXN pair, with key resistance and support levels to watch. Overall, the current situation emphasizes the importance of monitoring political developments, economic indicators, and central bank policies for investors and traders looking to navigate the Mexican Peso’s movements effectively.