Mexican diving peso as Banxico indicate further alleviating the tariff problems

The Mexican peso weakens the third day in a row, because the ton of Dovish Banxico, sticky inflation in the USA and fuel trade tensions of the USD/MXN rally.
Banxico reduces rates by 50 BPS to 9%, and signals more delicate despite the risk of inflation distorted up.
Peso under pressure among tariffs and lithe data from Mexico; Focus turns to NFP and ISM next week.

The Mexican peso (MXN) extends its agony during the week, cushioning the American dollar (USD) PO reduced the interest rates of Banco de Mexico (Banxico), but also paved the way to additional alleviation. This, along with the inflation report and trade policy in the United States (USA), increased Greenback. At the time of writing the USD/MXN exchange rate, it is 20.43, which is an escalate of 0.67%.

On Thursday, Banxico reduced rates by 50 base points to 9% with a unanimous decision due to the evolution of the disinflation process, although it predicts that the risk of inflation is tilted up. The Council predicts that inflation will soothe and “may consider adjusting it in similar sizes.”

In addition to economic data, the President of Mexico, Claudia Sheinbaum, commented that the United States agreement-Maxic-Tanada (USMCA) helps in North America to compete with China, adding that ongoing talks with the USA are intended to protect jobs in Mexico.

On the other side of the Bureau of Economic Analysis (BEA) border, it revealed that the Federal Reserve (FED) preferred the inflation rate, the basic indicator of personal consumption prices (PCE), tinked tenth up, disposing of 2%Fed.

Other data showed that consumer moods deteriorated in March, as announced by the University of Michigan (UOM), who also mentioned that inflation expectations increased rapidly, reflecting the consensus among all demographic and political affiliations revealed by the study.

Next week, the Mexican economic schedule will contain business trust, S&P Global Manufacturing PMI and constant investment data. In the United States, traders focus on the announcement of Trump tariffs on April 2, ISM Manufacturing PMI on the march, Jolts Job offers and non -Farmy payroll.

Daily Digest Market Movers: Mexican peso is dropped after the Banxico decision

Mexico’s trust in February was 50.4. Reading below this level would indicate that companies become despondent towards the economy, with the result the lowest level since May 2021.
S&P Global Manufacturing PMI remained on the systolic territory for eight -straight months to 47.6 in February. March Printing under this would suggest that the economic slowdown is deeper than predicting.
Personal consumption price indicator (PCE) issued by the American Bureau of Economic Analysis (BEA) remained unchanged at the level of 2.5% y / y.
The basic PCE print increased by 2.8% y / y, compared to 2.7% in the same period. Although the prints maintained the status quo, inflation still drains from the target 2%.
The University of Michigan consumer mood indicator has deteriorated a bit, falling from 57.9 in initial reading to 57.0. State households became despondent, expecting that prices will escalate by 5% per year, while inflation expectations in five years increased from 3.9% to 4.1%.
On Wednesday, Trump signed an executive order, adding 25% of the obligations in imported cars, in force on April 2. He said he would announce additional tariffs next week.
In 2024, the United States brought automotive products worth $ 474 billion, including passenger cars worth $ 220 billion. Mexico, Japan, South Korea, Canada and Germany were the largest suppliers.
Traders valued the FED to facilitate the policy by 64 base points (BPS) throughout the year, according to the data from the Chicago Board of Trade.

USD/MXN Technical perspectives: Mexican diving peso like target bulls USD/MXN

The Mexican currency remains pressure on the pressure, as the USD/MXN pair showed rapidly growing, clearing the convergence of 100 and 50-day straight average movable (SMA) near 20.35/36, opening the door to reach 20.45, recent week.

Momentum, measured by a relative force indicator (RSI), intends to exceed the latest peak, signaling that bulls enter.

Having said, the first resistance to USD/MXN would be 20.50. If it is exceeded, the next ceiling would be the peak on March 4, 20.99, and then year -on -year (YTD) of 21.28. And vice versa, a decrease below 20.35/36 paves the way of testing the mark 20.00.