The Mexican peso attracts some of the losses related to the Banksin after lowering the interest rate

The Mexican peso slightly rises, recovering some losses from the previous day.
Banxico lowers the rates, while the Fed remains careful, emphasizing contrasting economic perspectives, which does not bode well for peso.
The edges of USD/MXN fall when traders predict data on moods in Michigan, with the expectations of inflation and consumer trust.

The Mexican peso (MXN) consolidates against the American dollar (USD) on Friday after recovering part of the land lost on Thursday after Banco de Mexico (Banxico) decided to reduce interest rates as expected.

At the time of writing, USD/MXN trades nearly 19.485, which is a decrease of 0.04% during the day, when the pair moves slightly after Thursday’s reflection. The persistent uncertainty related to trade and divergent central bank policies remain key topics conducting a price campaign.

Market participants are waiting for a preliminary issue of data on consumer moods from the University of Michigan at 14:00 GMT, a key risk of an event that can affect the brief -term direction of USD/MXN.

The United States will publish three strictly observed indicators: consumer mood index, consumer expectations indicator and annual and 5 years of inflationary expectations for May. These funds offer timely insight into the trust of households, perceived price pressure and consumer behavior – critical input data in shaping expectations regarding the federal reserve policy (FED).

Fed the flags of risk inflation from structural shocks

The Federal Reserve (FED) adopted a cautious attitude in the airy of soothing economic signals and lasting uncertainty on the supply side. Speaking after the release of Thursday April, Fed Chairman Jerome Powell dealt with double topics of the slowdown and the risk of inflation.

The manufacturer’s price index (PPI) unexpectedly dropped by 0.5% compared to the highest month from the previous month from 2009 – while retail sales increased by only 0.1%, which suggests the suppressed consumer demand.

During his speech at the second research conference of Thomas Laubach on Thursday, Powell noticed: “The economy may enter a period marked by frequent and permanent delivery shocks”, while adding that the central bank remains “attentive to signs of demand of cooling” and that “inflation moves in the right direction, although the path forward remains uncertain.”

Although these changes can delay any changes in the direction of freezing politics, they also emphasize the fine balance of Fed, because at the same time monitors the risk of inflation and growth.

Banxico reduction emphasizes the national slowdown

On the other side of the political spectrum, Banxico provided a reduction in point 50 on Thursday, reducing its reference interest rate to 8.5% in a unanimous decision. This movement extended its soothing cycle in a row in a row, because the central bank is trying to stimulate the tardy domestic economy. In his statement after the meeting Banxico stated that:

“The Council estimates that looking to the future, it may continue the calibration of the monetary policy attitude and consider adjusting it in similar quantities. It expects that the inflation environment will allow you to continue the cycle of cutting the rate, although maintaining a restrictive position.”

Because Banxico signals more soothing, and the federal reserve maintains a careful, but lasting tone, the divergence of politics still favors the American dollar. Despite this, USD/MXN remains susceptible to changes in risks powered by a header, and data on the MICHIGAN University of Michigan moods may inject additional variability. The development of commercial policy and inflation expectations will also remain key factors in shaping a brief -term path for peso.

Mexican Peso Daily Digest: Banxico warns against commercial risk for the economy

Banxico reduced the percentage ratio by 50 base points to 8.5%. In the statement, the bank signaled that further similar cuts can be considered in the future.
Banxico warned against the influence of the current distance of trade with the United States on the country’s economy. “The environment of uncertainty and commercial tensions is a significant inheritance risk,” said the bank in its statement.
The growing commercial tensions of US-MEXSYK threaten the economy of the export of Mexico, in which over 80% of exports go to the USA. Tariffs for goods such as steel and aluminum can interfere with supply chains, suppress investors’ moods and weigh growth.
Banxico burden concerns about the deterioration of the economic situation. While inflation has increased in recent months to 3.93% in April, the bank still expects inflation to return to the destination 3% in the third quarter of 2026.
The United States imposed 25% of the tariff on some Mexican imports, which is not covered by the USMCA, citing concerns about safety and drug enforcement, increasing further uncertainty to bilateral trade relations.
According to Reuters, the Minister of Economy of Mexico proposed an early review of Usmca, in front of the schedule in 2026 to peaceful investors and keep the frames underlying over $ 1.5 trillion of annual trade in North America.
The US economy has contracted at the annual rate of 0.3% in the first quarter, which means the first decline from 2022. This unexpected slowdown caused above all an enhance in imports, because companies and consumers accelerated shopping before modern tariffs introduced by the Trump administration.

Technical analysis: USD/MXN Bearish Systadation Systral Date Silesia

USD/MXN remains under pressure, expanding its decrease below 78.6% of the fibonacci rally from October to February from 19.57. The couple currently trade around 19.45 because they did not regain the key psychological level of 19.50, and 19.40 acted as immediate resistance. This strengthens the prevailing rush of bears and suggests that sellers remain strongly control.

The scope of consolidation emphasized in the yellow box has still contained a price campaign over the past few weeks. However, repeated failures of breaking higher and the dominant signal of the inheritance that the bear continuation remains likely. This technical configuration is consistent with sturdy inheritance pressure, because the pair tries to gain adhesion above their brief -term average movable.

Another earnest support lies near the lowest level in October 19.11, which is a critical level that can serve as a medium -term target if the bears of the shoot persists. The break below this area would open the door to further losses, potentially revealing the psychological level of 19.00.

On the other hand, the initial resistance is observable at 19.40, followed by 78.6% Fibonacci’s growth to 19.57. A constant break over this zone may be the beginning of a change in sentiment, restoring the psychological area 19.60.

Daily chart USD/MXN

A 10-day straight moving average (SMA), currently 19.53, still acts as animated resistance, repeatedly limiting plus tests. Meanwhile, the relative force indicator (RSI) is about 40, which indicates a bland bear rush. Although not in sold -out territory, RSI suggests that there is a place for an additional minus before the technical reflection becomes more likely.

Frequently asked risk questions

In the world of financial jargon, two commonly used terms “risk” and “risk” relate to the level of risk that investors are willing to manage in the applied period. humble.

Usually, during “risk” periods of stock market markets will enhance, most of the goods-except for gold-will gain value because they benefit from positive development. Currency of nations, which are forceful exporters of goods, strengthen due to increased demand and cryptocurrencies. On the “Risk” market, bonds are growing-especially gigantic government bonds-the gold is shining and secure currencies, such as Japanese Jen, Swiss franc and American dollar.

Australian dollar (AUD), Canadian dollar (CAD), New Zealand dollar (NZD) and smaller FX, such as Rubel (Rub) and Rand Rand (ZAR), all tend to enhance markets that are “risky”. This is due to the fact that the economies of these currencies are largely dependent on the export of goods for growth, and the goods tend to enhance prices during risk periods. This is due to the fact that investors provide for a greater demand for raw materials in the future due to increased business activity.

The main currencies, which tend to grow during periods of “risk”, are the American dollar (USD), Japanese yen (JPy) and the Swiss franc (CHF). American dollar, because it is a global reserve currency, and because in the time of crisis investors they buy a US government debt, which is seen as secure, because the largest economy in the world will not guess. Jen, from increased demand for Japanese government bonds, because high percentage is kept by domestic investors who will rather lose them – even in crisis. French Swiss, because the strict Swiss banking regulations offer investors to enhance capital protection.