- Mexican PESO set weekly gains by 0.89 % as markets for economic flexibility.
- Mixed tariff comments from Trump moving fluctuation, but the risk raises emerging currencies in the market.
- Merchants are preparing to release GDP of Mexico in Mexico next week to measure the risk of stagnation.
Mexican peaso extended its gains against the US dollar for the second day in a row, about to finish the week with 0.89 % gains, under the auspices of improving the appetite of risks and Mexican economic data better. At the time of this report, the US dollar/MXN is traded at 19.52, a decrease of 0.32 %.
Wall Street closed with gains on Friday’s session, although US President Donald Trump made contradictory notes on China. The news revealed overnight to American merchants about Beijing’s readiness to reduce the customs tariff for American products. Nevertheless, Trump said he would not reduce the definitions unless he “gives us a big thing.”
The Institute of NACIONAL De Estadistica Geographia E Informatica (IGI) revealed that the Mexican economy grew in February, unlike expectations, which expected moderate expansion.
Meanwhile, in the United States, the consumer morale index deteriorated at the University of Michigan (UOM) sharply, as its fourth reading has been published since the late 1970s, which doubts that the Americans doubt economic expectations.
Therefore, USD/MXN decreased, driven by Goodish Mexico data. However, next week, INEGI will issue a GDP growth rate (GDP) for the first quarter of 2025. Negative reading will confirm that the economy is in a technical stagnation.
Daily Digest Market Movers: Mexican bizo was estimated during the week despite the BanCicPy Dovish mode
- The difference between Pancico and Favors prefer more bullish trend in the US dollar/MXN. Pancico’s board of directors has expressed his decision to continue to reduce policy. On the contrary, the Federal Reserve is cautious, as some officials have shown concerns about the inflation stimulating the definitions.
- Mexico’s economic activity expanded in February by 1 % of the mother, above forecast for 0.6 % growth. On an annual basis, the activity decreased from 0 % to -0.7 %, better than expected.
- The economic data that was revealed during the week witnessed a sequence on inflation in the first half of April, which revealed INEGI. Retail sales in February were less than expected, as they offered the constant economic slowdown.
- He said in Washington that Pancico’s Deputy Governor Omar Megia Castillaso revealed that the economy has been slowly since the fourth quarter of 2023.
- Citi Mexico’s expectations show that economists expect Pancico to reduce its average by 50 basis points at the May meeting. For the whole year, they prepare the main reference rate to finish approximately 7.75 %.
- Regarding the USD/MXN exchange rate, private analysts believe that the strange husband ends at 20.93, up from 20.90. The inflation is expected to end in 2025 by 3.78 % with basic numbers often by 3.80 % with the previous survey.
- Mexico’s economy is expected to grow by 0.2 % in 2025, less than 0.3 % expected in the previous survey.
Technical expectations in US dollars/MXN: Mexican bizo is still optimistic as USD/MXN remains at the bottom of the main technical level
The price procedure indicates that the US dollar/MXN is greatly biased and may continue in the declining direction, as soon as it records a daily closure less than 19.50. In this result, the next support will be a decrease of 23 of 19.46, which is low from the year to the date (YTD), followed by the psychological number 19.00.
If buyers want to pay prices up, they must restore SMA for 200 days in 19.93, followed by the number 20.00. The latter breach will be shown, the height of April 14 and 50 days, SMA near 20.25-20.29 before SMA test for 100 days at 20.33.
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.
