- Mexican bizo slides amid increasingly stakes to reduce the prices of pansico and universal certainty.
- The economic data in Mexico disappoints through the decrease in private spending and activity estimates that indicate contraction in February.
- Pancico is expected to reduce 50 basis points on March 27, where inflation remains higher than the target and the gross domestic product is reviewed.
- Trade tensions in the United States and Mexico, and the Federal Reserve warned against the prosperity of the US dollar/MXN with traders looking to inflation decisions and inflation rate next week.
The Mexican Bezo remained defensive against the US dollar on Friday, supported by concerns over the commercial policies implemented by the United States (the United States) amid a crowd week in the central bank area. The most soft data in Mexico indicates that the economy slows down more than expected, and thus a decrease in the value of the bizo. USD/MXN is traded at 20.23, an increase of 0.45 %.
During the week, Mexico’s economic data was mixed after the total demand and private spending numbers were issued. The previous expansion, but spending a decrease in the fourth quarter of last year. An initial reading of economic activity is estimated that the economy that was contracted in February has increased the chances that Panco de Mexico (Pancico) will continue to reduce policy even though inflation did not reach a goal of 3 %.
The latest Citi Mexico Survey of expectations revealed unanimously unanimously that Banxico will reduce interest rates by 50 basis points (BPS) at the March 27 meeting. Most analysts reviewed the main reference rate of Mexico for the year 2025, landing and reviewing the basic inflation numbers and basic inflation.
It should be noted that GDP GDP (GDP) has been reviewed, while the USD/MXN exchange rate was set slightly lower.
Through the border, the US economic list remained empty on Friday, but the merchants continued to digest the FBED monetary policy decision on Wednesday.
The statement revealed that policymakers see politics appropriately and the survey that it will cool down the pace of reducing the public budget. The President of the Federal Reserve Powell said that they are not in a hurry to reduce prices and admitted some uncertainty about the future of the economy due to the American definitions.
Other New Zears officials on Friday failed to run the reaction of the USD/MXN exchange rate. The head of the New York Reserve Council, John Williams, said that the current humble monetary policy is “perfectly suitable”, adding that uncertainty makes it difficult to know how to perform the economy.
Austan Golsby of the Federal Bank in Chicago said that when there is a lot of uncertainty, you should wait for the clarification of things.
Next week, the economic list in Mexico will include inflation numbers in mid -March, retail sales, commercial balance numbers, and interest rate decision in Pancico. In the United States, traders were watching the Federal Reserve’s favorite inflation scale, a basic personal consumption price index (PCE).
Digest Market Mark: Mexican Bizo is retreating while economists Pancico beats
- The Citi Mexico Residentals poll showed that most analysts expect that interest rates will end by 8 % in 2025, a decrease from 8.25 % in the previous version. USD/MXN is expected to end in 20.98, a decrease from 21.00 in the last survey.
- The inflation is expected to increase in mid -March from 3.77 % in February to 3.80 % on an annual basis, as shown in the survey, and basic prices decrease from 3.61 % to 3.65 % on an annual basis.
- The inflation expectations remained in a 3 % high range, while GDP expected to expand by 0.6 %, a decrease from 0.8 % in the last survey.
- The Mexico Global Economic Activity Index decreased by 0.7 % on an annual basis in February. Compared to January, the economy most likely grew by 0.2 % of my mother.
- The Organization for Economic Cooperation and Development revealed earlier this week that the American definitions of Mexican products can stimulate the recession in Mexico.
- Traders have priced the FBI to reduce policy by 71 basis points (BPS) throughout the year, and data from the Chicago Trade Council revealed.
Technical expectations USD/MXN: Mexican bizo retracts where USD/MXN climbs above 20.20
The USD/MXN is merged after the annual low reached on March 14 at 19.84, but it is still surrounded by the number 20.30, which the sellers defend, which also tends to the simple moving average for 100 days (SMA) at 20.35 and 50 days SMA at 20.40.
RSI is dumping. However, in the short term, it prefers buyers. The index is about to cross over its neutral plan, which paves the way for more upward trend.
In this result, USD/MXN needs Smas 100 and 50 days. Once it exceeds, the next roof level will be the peak of March 4 at 20.99. On the contrary, the first main support is 20.00, followed by a decrease of YTD 19.84, before SMA for 200 days in 19.68.
Pancico is common questions
Mexico Bank, also known as Pancico, is the central bank in the country. Its mission is to maintain the value of Mexico, Mexican Peso (MXN), and control of monetary policy. To this end, its main goal is to maintain low and stable inflation within the target levels – at or close to its 3 % goal, the center point in the tolerance range ranges between 2 % and 4 %.
The main tool for banknotes for monetary policy guidance is to determine interest rates. When inflation is higher than the target, the bank will try to tame it by raising prices, which makes it more expensive for families and companies to borrow money and thus cool the economy. The highest interest rates are generally positive for Mexican Peso (MXN) because it leads to higher returns, making the country a more attractive place for investors. On the contrary, low interest rates tend to weaken MXN. The difference in the average with the US dollar, or how Banxico is expected to determine interest rates compared to the Federal Federal Reserve (Fed), which is a major factor.
Pancico meets eight times a year, and its monetary policy is greatly affected by the US Federal Reserve decisions (Fed). Therefore, the Central Bank Resolution Committee usually gathered a week after the Federal Reserve. When doing this, Pancico interacts and sometimes expects monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before raising the federal reserve rate, Pancico was first trying to reduce the chances of a significant decrease in the Mexican Bzo (MXN) and to prevent capital flows that could shake the country.
