The Mexican Peso: Recent Trends and Market Analysis
USD/MXN Exchange Rate Movement
- The Mexican Peso has experienced four consecutive days of losses against the US Dollar.
- US Retail Sales and job data exceeded expectations, strengthening the US Dollar.
- Currently, the USD/MXN trades at 19.92, a 0.28% increase from its opening price.
Factors Influencing Mexican Peso Movement
- Former President Trump’s tariff threat on Mexican-made cars has contributed to the Peso’s decline.
- The IMF has revised Mexico’s 2024 growth forecast down to 1.5%, citing a slowdown and rising inflation risks.
US Economic Data Impact
- US Industrial Production decreased due to external factors like the Boeing strike and hurricanes.
- Despite positive data, the Fed is expected to lower interest rates by 25 basis points at the upcoming meeting.
Market Outlook
- Future US data releases, including Building Permits and Housing Starts, may influence the USD/MXN direction.
- IMF reports and Banxico surveys provide insight into Mexico’s economic forecast and central bank policies.
Daily Digest Market Movers: USD/MXN Surges Past 19.90
- September US Retail Sales exceeded estimates, showing a 0.4% increase.
- Initial Jobless Claims for the week ending October 12 came in below expectations.
- Investors estimate 48 basis points of Fed easing by year-end.
USD/MXN Technical Outlook: Analyzing Market Trends
- The USD/MXN uptrend continues, with the RSI indicating bullish momentum.
- If the USD/MXN surpasses 20.02, it may reach the YTD high of 20.22.
- A drop below 19.82 could lead to a test of support levels at 19.61 and 19.10.
Mexican Peso FAQs
Key Points to Understand the Mexican Peso
- The MXN value is influenced by the Mexican economy, central bank policies, foreign investment, remittances, and geopolitical trends.
- Banxico aims to maintain stable inflation levels through interest rate adjustments, impacting MXN value.
- Macroeconomic data, economic strength, and market sentiment affect MXN valuation.
- MXN performs well during risk-on periods and weakens during market turbulence.