The Mexican Peso: A Financial Overview
- The Mexican Peso (MXN) strengthens to 19.60 against the US Dollar
- Business Confidence for September expected to improve for the fourth consecutive month
- US Dollar Index rises by 0.20% on strong economic data
Analysis of the Mexican Peso Movement
The Mexican Peso has started the week on a positive note, showing a 0.30% gain against the US Dollar. Anticipation is building ahead of Claudia Sheinbaum’s inauguration on October 1, which is seen as a significant event for the currency. Currently trading at 19.60, the USD/MXN pair is below its opening price, reaching a daily high of 19.73.
Key Events in Mexico
On October 1, Claudia Sheinbaum’s inauguration is scheduled, with market participants keen on her remarks regarding the economy and fiscal policies. The next day, Business Confidence for September will be released, potentially marking a fourth consecutive month of improvement after a low of 52.9.
US Economic Data Impact
On the US side, the Chicago Fed National Activity Index exceeded expectations, indicating a positive trend in the economy. Atlanta Fed President Raphael Bostic’s comments on potential rate cuts and inflation monitoring also influenced market sentiment.
Market Movers and Economic Indicators
- Mexican political stability ahead of the presidential transition on October 1
- Anticipation of a 175 bps rate cut by Banxico by 2025
- Chicago Fed National Activity Index shows improvement, overshadowing estimates
- Personal Consumption Expenditures (PCE) Price Index report indicates mixed inflation trends
- Market expectations of a 25 bps rate cut, with chances of a 50 bps cut increasing
Technical Analysis of USD/MXN
The USD/MXN pair remains in an upward bias but faces uncertainty surrounding Sheinbaum’s policies. The Relative Strength Index (RSI) is bullish, with short-term selling pressure.
If USD/MXN drops below 19.50, key support levels are at 19.23 and 19.06. A bullish scenario requires breaking above 19.75 and 20.00 levels.
Mexican Peso FAQs
Here are some frequently asked questions about the Mexican Peso:
- Factors influencing MXN value include the country’s economy, central bank policy, foreign investment, remittances, and geopolitical trends.
- Banxico’s objective is to maintain low and stable inflation through interest rate adjustments.
- Macroeconomic data releases and market sentiment impact MXN valuation.
- MXN tends to perform well during risk-on periods and weakens during market turbulence.