- USD/MXN apartments near 19.58 as a pliable Mexican production and pigeons tilting Banxico against the data of employment in the USA.
- Mexico gift data suggest that the economic slowdown can be continued when PMI reaches the three -year level, business trust worsens.
- Banxico is observable in May, increasing the political gap from the Fed and pressure on PESO perspectives.
The Mexican peso (MXN) remained firm in relation to the American dollar (USD), although it is ready to end a week with losses of over 0.40% after economic data revealed in Mexico, painted gloomy economic perspectives, despite the fact that the economy surprised in the first quarter of 2025, solid jobs in the field of recession on the subject recession on MXD/MXN near 19.58.
The Mexican economic document revealed that business trust has worsened the third month in a row in April. At the same time, S&P Global revealed that production activities in the same period fell to the lowest level for three years, enabling the fourth month in a row in accordance with the PMI production index.
In the entire northern border, positive commercial messages between the USA and China constrained the profits of the USD/MXN pair, when Greenback recorded some losses. On the data front, the April payroll lists exceeded the estimates and went to the previous reading. In addition to this unemployment rate, PAT stands, emphasizing the solidity of the US labor market.
The Federal Reserve (FED) is expected to keep the rates unchanged next week. On the contrary, Banco de Mexico (Banxico) signaled his intentions to further mitigate the monetary policy at a meeting in a May meeting to support the economy, although inflation did not achieve 3% of goals. Therefore, the discrepancy between the two central banks can press on peso and enhance the perspectives of the American dollar.
Daily Digest Market Movers: Mexican peso dissatisfaction of bad data
- Mexico’s trust in April was 48.5, compared to 49.7 revealed by the Instituto Nacional de Estadist Geographer E Information (Inegi). This and S&P Global Manufacturing PMI SCRUCTION in the same period, immersing from 46.5 to 44.8, indicates that economic prospects look worse in the future than expected.
- Although the latest data on the gross domestic product (GDP) surprised the markets, showing that the economy has increased, tariffs applied to Mexican products, along with a budget reduction, would maintain stress the financial sector in the country.
- In April by 177 thousand American wages (NFP) in April, overcoming the expectations of 130,000, though slightly below the reduced 185,000 From March. The stronger than expected print contrasted with a weaker report to the employment of ADP at the beginning of the week, which suggested a slower employment rush.
- The unemployment rate remained at 4.2%, according to forecasts. Stable work force can be justified by the federal reserve to stop politics in the near future.
Technical perspectives USD/MXN: Mexican peso remains stubborn, like USD/MXN remains below 200-day SMA
The downward trend of USD/MXN remains in place, although the last price actions suggest a potential bottom around 19.46–19.50. Relative strength rate (RSI) near 30 levels, exhaustion of the signaling seller.
The decrease below the low YTD at 19.46 would reveal the psychological level of 19.00, and further weakness can lead to a test on June 28 summarizing in terms of high summary at 18.59.
On the other hand, passing over 20-day SMA by 19.88, and the 200-day SMA near 19.97 would change the shoot in favor of buyers, opening the door to recover the sign 20.00, and then SMA 50-day to 20.12.
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 steep 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 enhance interest rates, especially if this force connects with increased inflation. However, if economic data is faint, 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 secure time.
