Mexican bizo companies, despite the weak data, as the deals turn into caution in the US -Chinese talks
- The Mexican Bezo ignores soft data, and a four -day rally extends with the meeting of merchants in the United States of China in Switzerland.
- Consumer confidence in Mexico decreases for the seventh month; Car export fell under the tariff of the new United States.
- Federal reserve officials maintain a waiting and vision approach, highlighting the uncertainty on the effect of the tariff on the American economy.
The Mexican PESO (MXN) recorded modest gains against the US dollar (USD) on Friday, as the market participants turned into caution before the United States -Chinese talks in Switzerland. The emerging market currency (EM) has been unbroken due to the worst economic expectations expected, as Mexico’s data continues to deteriorate.
At the time of this report, the US dollar/MXN is traded at 19.46, less than the opening price of 0.33 %, and a decrease in the current date (YTD).
Consumer confidence in Mexico, as revealed by the NACIONAL De EstadíStica, GeoGRAFíA E Informáica (INEGI), showed that families have become pessimistic about expectations in April. The numbers decreased from 46 to 45.3 for the seventh month in a row.
Other data revealed by INGI cars and exports, with both people as new definitions in the United States, included cars, which led to the decline in shipments to the United States.
Despite the spread of the bleak economic data, the bizo is strengthened with the US dollar/MXN declining for the fourth consecutive day.
Through the northern border, Federal Reserve officials (Fed) occupied the headlines. They emphasized that the current monetary policy is appropriate and that the central bank needs to wait and know how definitions affect the American economy.
Daily Digest Market Movers: Weakness in the automotive industry to praise the Mexican bizo
- Car production decreased by 9.1 % in April, a decrease from an increase of 12.1 % in the previous month. Among the main brands that reduced their production are stellantis, by -46.7 %, followed by BMW by -27.1 %.
- Mexican car exports in April revealed -10.9 % after an increase of 3.8 % in March, Engy revealed. Mazda and Volkswagen have witnessed decreases of -60.9 % and -44.4 %, respectively, in exports.
- Inflation data increased in April by 3.93 % year on an annual basis, higher than expectations by 3.90 %. Basic prices increased by 3.93 % than 3.64 % higher than 3.92 % estimates.
- Trader’s concentration moved to the Banco De Mexico (banxico) monetary meeting on May 15. CITI economists expect to reduce 50 basis points (BPS) by the Mexican Foundation, with the support of the latest data for the policy revealed by the central bank.
- Although Mexico’s economy avoids narrowly the technical recession, the definitions imposed on Mexican products, a low budget, and the geopolitical doubts will continue to overcome the country’s financial affairs and influence the peaso.
USD/MXN Expectations: Mexican Bizo regains the strength of USD/MXN YTD low
USD/MXN tests a decrease YTD, however sellers collide with buyers with the market’s willingness to the weekend. The daily/weekly closure can lead to less than 19.50 to exacerbate the move about 19.00.
The RSI is preferred to sellers, indicating that the additional weakness awaits us.
On the contrary, if buyers raise the USD/MXN after 19.59, the next resistance will be the simple moving average for 20 days (SMA) in 19.66, followed by SMA for 200 days in 19.99 before SMA for 50 days at 20.02.
Common questions between Mexican Peso
The Mexican Bezo (MXN) is the most circulating currency among its peers in Latin America. Its value is widely determined by the performance of the Mexican economy, the country’s central bank policy, the amount of foreign investment in the country and even the levels of transfers sent by Mexicans who live abroad, especially in the United States. Geopolitical trends can also move MXN: for example, the proximity process – or the decision of some companies to transfer manufacturing capabilities and supply supply chains near their countries of origin – is a motivation for the Mexican currency as the country is a main manufacturing center in the American continent. Another MXN catalyst is oil prices because Mexico is a major source of commodity.
The main goal of the central bank in Mexico, also known as Pancico, is to maintain inflation at low and stable levels (in or near its 3 % target, the center point in the range of tolerance between 2 % and 4 %). To this end, the bank determines an appropriate level of interest rates. When inflation is very high, BancicPico will try to tame it by raising interest rates, making it more expensive for families and companies to borrow money, thus cooling demand and macroeconomic 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 total economy data is a key to assessing the state of the economy and can have an impact on the Mexican PESO (MXN) evaluation. The strong Mexican economy, based on high economic growth, is a decrease in unemployment and high confidence, useful for MXN. It not only attracts more foreign investments, but may also encourage the Bank of Mexico to increase interest rates, especially if this force corresponds to high inflation. However, if economic data is weak, MXN is likely to decrease.
As a currency of the emerging market, the Mexican Biso (MXN) tends to strive during risk periods, or when investors see the wider market risk low and thus yearn to communicate with investments that bear greater risks. On the contrary, MXN tends to be weak in times of turmoil in the market or economic uncertainty where investors tend to sell high -risk assets and flee to the most resigned safe havens.
