Mexican peso rallies like USD/MXN fall below 20.00 on careful Powell statements

Mexican peso appreciates 0.58% as USD/MXN decreases below 20.00 on a sour risk tone, a frail American dollar.
Powell signals caution over inflation, notices a inheritance risk and a solid labor market; Fed saw the holding rates.
Chinese GDP forecasts are beating, increasing EM currencies; The chip export curbs went to the technology sector in the USA and NASDAQ.
Sheinbaum disregards the American tomato tariffs, says that Mexico remains a key supplier among commercial tensions.

The Mexican peso continues to the American dollar, because the market appetite remains acidic, and the chairman of the Fed Jerome Powell emphasized that it remains a bit focused on inflation, because the economy is almost maximum employment. At the time of writing, USD/MXN trades at 19.96, which is a 0.58%decrease.

The market mood is depressed because the fears of tariffs remain. The United States imposing Chip exports to China burdened the main semiconductor companies by sending a drifting drifting NASDAQ. Despite this, China reported that the data of the gross domestic product (GDP) in Q1 2025 sponsored better than expected, sponsored currencies on the rising market (EM), such as peso.

Powell said that the policy is well prepared, adding that the economy is “solid” despite the uncertainty and risk of decline. He stated that the growth probably slowed down in the first quarter of 2025, causing the possibility of a stagicing script, after he said: “Two Fed goals are not yet tense, but the impulse concerns higher unemployment and higher inflation.”

Meanwhile, the President of Mexico, Claudia Sheinbaum, continued his negotiations with his American counterpart to avoid Trump’s higher tariffs and said that 20.91% of tomato tariffs would not happen. She added: “This process has been performed many times, and Mexico has always won. But even if this sanction were to be applied, Mexican tomatoes would still be exported to the United States, because there is no substitute; the main problem would be that tomatoes would be more expensive in the United States.”

On the northern limit, retail sales in the USA were doing better than expected, while American industrial production counted more than expected.

In Docket, Mexico, it will be equipped with retail sales, inflation in the middle of the month in April and economic activity until February to the next week. In the United States, data on apartments and initial claims of the unemployed will be disclosed on Thursday.

Daily Digest Market Movers: Mexican peso progress among the absent economic document

The retail sales of Mexico in January amounted to 0.6% of mom and 2.7% y / r. If the data drops below these numbers, it would be another signal that the economy slows down, as the Governor Banco de Mexico (Banxico) Victoria Rodriguez Ceja mentioned.
Before the Senate of Victoria Rodriguez, Ceja said that the management council is still dissatisfied with the inflation rate, which amounted to 3.8% in March, though far from the purpose 3%. She added that the process of disinflation and economic slowdown justify the Banxico approach and suggested that the central bank may continue to alleviate politics.
Reducing the difference in interest rates between Mexico and the United States suggests that further augment is apparent in the USD/MXN exchange rate. This is due to the fact that Banxico is to reduce the rates by 50 base points (BPS) at the May meeting, while the first traffic of the fed is expected in July.
Money market players valued at 91 BPS facilitating by the FED at the end of 2025. The first cut is expected in July.
Retail sales in the USA increased in March by 1.4%, overcoming expectations by 1.3% and were much higher than 0.2% of February, driven by sturdy car sales. However, the control group, which supplies GDP calculations, increased only by 0.4%, compared to 1.3%in February and below 0.6%forecast.
The federal reserve revealed that US industrial production dropped by 0.3% to an augment of 0.8% in February.

Technical perspectives in USD/MXN: Mexican peso gain grounding, such as USD/MXN falls below 20.00

The USD/MXN growth release remains intact, although the pair drifts below the level of 20.00. Sellers seem to be ready to test the 200-day SMA to 19.86, but they will have to spotless it at daily closure so that they can hope to question the number of 19.50. In this result, the next support will be 19.00.

And vice versa, if the buyers impose a USD/MXN exchange rate above 20.00, it could open the door to test the highest level of April 14, 20.29, which would open the door to the 50-day and 100-day conflict of SMA near 20.30–20,36, and then resistance 20.50. Cleaning these levels can lead to a re -test of the summit on April 9 to 21.07.

Mexican PESO questions

The Mexican peso (MXN) is the most traded currency among its peers from Latin America. Its value depends widely by the results of the Mexican economy, the policy of the Central Bank of the Country, the amount of foreign investment in this country, and even levels of monetary messages sent by Mexicans living abroad, especially in the United States. Geopolitical trends can also move MXN: for example, the newcombating process – or the decision of some companies to transfer production capacity and supply chains closer to their family countries – is also seen as a catalyst of the Mexican currency, because the country is considered a key production hub on the American continent. Oil prices are the next MXN catalyst, because Mexico is a key exporter of the goods.

The main goal of the Central Bank of Mexico, also known as Banxico, is to maintain inflation at low and stable levels (in order or 3%similar to the purpose, the middle point in tolerance bands from 2%to 4%). For this purpose, the bank sets an appropriate level of interest rates. When the inflation is too high, Banxico will try to tame it by collecting interest rates, which makes it more exorbitant for households and companies to borrow money, and thus cooling demand and general economy. Higher interest rates are generally positive for the Mexican peso (MXN), because they lead to higher crops, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.

The release of macroeconomic data is crucial for the assessment of the state of the economy and may affect the Mexican valuation (MXN). A sturdy Mexican economy, based on high economic growth, low unemployment and high trust, is good for MXN. It not only attracts more foreign investment, but can encourage Bank Mexico (Banxico) to augment interest rates, especially if this force connects with increased inflation. However, if economic data is frail, MXN probably absorbs.

As a currency on the emerging market, Mexican peso (MXN) strives to strive during risk periods or when investors see that wider market risk is low, and therefore willingly engage in investments that have more risk. And vice versa, MXN tends to weaken during market turbulence or economic uncertainty, because investors usually sell assets with a higher risk and resort to more stable sheltered time.