- The USD/MXN wins 0.33% on the first day of the week, currently operating in 19.56.
- The dollar index (DXY) falls 0.41% today, reaching minimum of April 23 in 98.86.
- The unemployment rate of Mexico falls to 2.2% in March, improving the forecasts of analysts.
- The operators will be attentive to the publication of the GDP of Mexico, as well as the ADP Employment Report and the US Gross Domestic Product, on Wednesday, April 30.
The USD/MXN reacted down from the maximum of April 22 in 19,7228, finding vendors that dragged the parity to a minimum of three days in 19.48. At the moment, the USD/MXN operates over 19.57, winning 0.35% on Monday.
The Mexican peso quotes on negative terrain prior to the publication of key economic data
Based on information provided by the National Institute of Geography and Statistics (INEGI), the Mexico unemployment rate decreased to 2.2% in March, compared to 2.5% in February, improving the forecasts of 2.4% of analysts.
On the other hand, the dollar index (DXY) goes back 0.41% in the day, reaching minimums not seen since April 23 at 99.09.
The economic agenda considers the publication of the Gross Domestic Product of Mexico on Wednesday, April 30, which registered an increase of 0.5% the previous month. Similarly, the underlying personal consumer expenses index, the ADP Employment Report and the preliminary GDP of the United States, the market consensus provides a 0.4% growth in March, less than 0.8% observed in February.
In this scenario, the Mexican weight operates with positive terrain losses, while the USD/MXN wins 0.33%, currently quoting about 19.56.
USD/MXN Price levels
The USD/MXN reacted down from a short -term resistance given by the maximum of April 9 in 21.08. To the south, the closest support is in 19.38, minimum of September 18, 2024. The following key support zone is observed in 18.59, pivot point of August 16, 2024.
Mexican weight FAQS
The Mexican weight (MXN) is the most commercialized currency among its Latin American peers. 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 remittance levels sent by Mexicans living abroad, particularly in the United States. Geopolitical trends can also affect MXN: for example, the Nearshoring process (or the decision of some companies to relocate the manufacturing capacity and supply chains closer to their countries of origin) is also considered a catalyst for the Mexican currency, since the country is considered a key manufacturing center in the American continent. Another catalyst for MXN is oil prices, since Mexico is a key exporter of the raw material.
The main objective of the Central Bank of Mexico, also known as Banxico, is to maintain inflation at low and stable levels (in or close to its 3%target, the midpoint of a tolerance band between 2%and 4%). To do this, the bank establishes an adequate level of interest rates. When inflation is too high, Banxico will try to control it by raising interest rates, which makes the indebtedness of homes and companies more cooling, thus cooling the demand and the economy in general. The highest interest rates are generally positive for Mexican weight (MXN), since they lead to higher yields, which makes the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken the MXN.
The publication of macroeconomic data is key to evaluating the state of the economy and can have an impact on the valuation of the Mexican weight (MXN). A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only attracts more foreign investment, but it can encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this fortress is accompanied by high inflation. However, if the economic data is weak, the MXN is likely to depreciate.
As an emerging market currency, the Mexican weight (MXN) tends to rise for periods of risk, or when investors perceive that the general market risks are low and, therefore, are eager to participate in investments that carry a higher risk. On the contrary, the MXN tends to weaken at times of market turbulence or economic uncertainty, since investors tend to sell higher risk assets and flee to the most stable safe shelters.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
