Mexican peso struggles when the markets react to tender data, fear of trade

Mexican peso slip in connection with the growing factories to reduce the Banx rate and global uncertainty.
Economic data of Mexico disappoints private drops in expenditure and estimates of activity indicating contraction in February.
Banxico expected to lower the rate by 50 BPS on March 27, because inflation remains above the target and the GDP is changed.
Commercial and fed by American-mexicic caution maintain the swimming of USD/MXN, and traders look at inflation decisions and rates rates next week.

The Mexican peso remained defensive towards the American dollar on Friday, driven by fear of commercial policy, which the United States (USA) implemented among the challenging -working week in the space of the central bank. More softer data in Mexico suggest that the economy slows down more than expected, hence peso cushioning. USD/MXN trades at 20.23, which is an escalate of 0.45%.

During the week, the economic data of Mexico was mixed after the release of aggregated demand and private expenses. The first one expanded, but expenses fell in the fourth quarter of last year. Preliminary reading of economic activity estimates that the economy has concluded a contract in February, increasing the chances that Banco de Mexico (Banxico) will continue to alleviate politics, even though inflation has not achieved 3% of the target.

The latest study of the expectations of Citi Mexico showed unanimous consensus that Banxico will reduce interest rates by 50 base points (BPS) at the meeting on March 27. Most analysts changed the basic reference rate of Mexico for 2025 down and changed the number of inflation of the header and core.

It is worth noting that the gross domestic product (GDP) has been changed, while the USD/MXN exchange rate has been corrected slightly lower.

On the other side of the border, the American economic document remained empty on Friday, but traders continued on Wednesday the decision of the monetary policy of the Federal Reserve (FED).

In the statement, it revealed that decision -makers perceive the principle accordingly and suggested that they would cold down the rate of balance sheet. Fed Powell chairman said that they were in a hurry to lower the rates and recognized some uncertainty as to the future of the economy due to US tariffs.

Other officials exceeded Newsreres on Friday, but USD/MXN currency response could not be caused. The President of New York Fed, John Williams, said that the currently restrictive monetary policy is “completely suitable”, adding that uncertainty makes it hard to know how the economy will work.

Austan Goolsbee from Chicago Fed said that when there is a great uncertainty, you must wait for things to explain.

Next week in Mexico, Economic Docket will cover March inflationary data, retail sales, the number of trade balances and the Banxico interest rate decision. In the United States, traders would look at the preferred Fed inflation rate, the basic indicator of personal consumption prices (PCE).

Daily Digest Market Movers: Mexican peso falls as economists eye bare

The study of Citi Mexico’s expectations has shown that most analysts expect that interest rates will be at 8% in 2025, compared to 8.25% in the previous issue. USD/MXN is expected to end at 20.98, compared to 21.00 in the last study.
It is expected that inflation in the middle of the month March will escalate from 3.77% in February to 3.80% y / y, as shown in the survey, and the core prices are expected from 3.61% to 3.65% installment.
Inflation expectations remained anchored in a high range of 3%, while GDP is expected to escalate by 0.6%, compared to 0.8%in the last study.
The global index of Mexico’s economic activity dropped by 0.7% y / RW February. Compared to January, the economy has probably increased by 0.2% of mom.
The organization of economic cooperation and development revealed at the beginning of this week that American tariffs for Mexican products can stimulate a recession in Mexico.
Traders valued the FED to facilitate the policy with 71 base points (BPS) throughout the year, as the data from the Chicago Board of Trade was revealed.

Technical perspectives in USD/MXN: Mexican peso retreat such as USD/MXN climbing above 20.20

Consolidates USD/MXN after withdrawal of annual falls reached on March 14 at 19.84, but remains restricted by the number 20.30, defended by sellers, who also rely on a 100-day straight movable medium (SMA) on 20.35 and 50-day SMA at 20.40.

The relative strength indicator (RSI) is bears. However, in a miniature period he favors the buyer. The indicator intends to cross its neutral line that would pave the way to a further mountain.

In this result, USD/MXN must neat 100 and 50-day SMA. After exceeding the next level of the ceiling, the peak would be on March 4 to 20.99. And vice versa, the first key service is 20.00, followed by YTD LOW from 19.84, before the 200-day SMA at 19.68.