Mexican peso slides down on a recession after a drop in Q4 GDP

Mexican GDP contracts for the first time from 2021.
Banxico reduces growth prospects of 2025 to 0.6%, well below the forecasts of the financial ministry.
Mixed data: PMI production improves, but PMI services are cramps.

The Mexican peso (MXN) lost some of the grounds for the American dollar (USD) on Friday, when the Mexican economy slowed down in the last quarter of 2024. President Donald Trump. USD/MXN trades at 20.41, recording profits of 0.54%.

The Mexican economy concluded in the fourth quarter of 2024 for the first time since the third quarter of 2021 revealed the Statistical Agency Inegi. The gross domestic product (GDP) adapted estimates every year and immersed in comparison with the previous reading and forecasts per year.

Banco de Mexico (Banxico) expects that the escalate this year will ponderous down by 0.6%, as the last minutes of meetings have been revealed. The management board expects the economy to escalate by 0.6% in 2025, compared to 1.2% expected, much below the projection of the Ministry of Finance, Mexico 2.3% and below the Citi expectations study of 1%.

Given the background, the USD/MXN pair shows further growth. S&P Global revealed that production activity in the United States has improved. Meanwhile, PMI services breathed for the first time on the systolic territory since January 2023.

Other data has shown that the existing sales of houses fell, and the final reading of the consumer sentiment of the University of Michigan (UOM) in February deteriorated.

Daily Digest Market Movers: Mexican hefty peso, the economy will be worse

The gross domestic product (GDP) has shrunk by -0.6% QOQ in the fourth quarter of 2024, compared to 1.1% expansion and matched REUTER surveys.
On the annual conditions, the Mexico economy increased by 0.5% in Q4 compared to the 2023 numbers. Growth achieved 1.2% throughout the year, the worst annual number since 2020.
The discrepancy of monetary policy between Banxico and Fed favors another USD/MXN Upside. The Fed is expected to keep the rates and Banxico is foreseen to re -reduce the rates by 50 base points at the next meeting.
At the time of writing this text, US President Donald Trump repeated a tariff of 25% in cars, in force on April 2.
Commercial disputes between the USA and Mexico remain in the foreground. Although these countries have previously been found a common plane, USD/MXN traders should know that 30 days will occur and voltages may appear at the end of February.

USD/MXN Technical perspectives: Mexican peso falls like USD/MXN reflects to 20.20

The USD/MXN pair does not present sudden changes, with a trend slightly tilted up. At the bottom near the 100-day straight movable medium (SMA) at 20.23, the buyers pushed a few up. Nevertheless, mixing resistance near 20.40 maintains an exotic trading pair sideways.

If USD/MXN cleans 20.40, the next resistance would be 20.50 and then from 17 January 20.93. With further strength, subsequent key levels of immunity are 21.00, and year -on -year (YTD) of 21.28. And vice versa, if the pair falls below 20.23, the 20.00 figure is next. The violation of the latter reveals on October 18, 2024, low at 19.64, before the 200-day SMA at 19.37.