- The USD/MXN falls to a minimum of a week and a half in 19.92.
- The US dollar tries to stabilize against part of the main currencies but yields to the Mexican peso.
- Donald Trump announced that he could temporarily pause tariffs to the automobile sector while his trade department warned that he will impose rates for Mexican tomatoes from July.
- New York Manufacturing Empire improves forecasts in April but continues to show a weakened sector.
The USD/MXN records its third consecutive loss day on Tuesday. The pair opened the day testing a daily maximum of 20.10 but has reached the American session falling to its lowest level since April 4 in 19.92.
At the time of writing, the pair of UDS/MXN is quoted by 19.94, falling 0.68% in the day.
The dollar records slight profits against some of its counterparts, but falls against the Mexican peso
The latest ads about tariffs are favoring Mexican weight. Late yesterday, Donald Trump pointed out that he could provisionally cancel tariffs on the automobile sector, since it was necessary for a while until the US could produce some of the components. Although Mexico already benefited from this temporary exemption, the comments reinforced the opinion about a change of course in the face of the evidence that the new tariff policy harms all parties, including the United States, that a serious danger of stagflation is in.
He Dollar index (DXY) is reputing today, driven by tariff relief that could be ever seasoned, although the green ticket rise is not very important Because Trump gave one of lime and another of sand by anticipating that they are thinking of putting tariffs on pharmaceutical products, also warning that from next week rates on semiconductors will be announced. The DXY rises 0.21% at the moment over 99.91, recovering land from the minimum of three years reached on Friday about 99.00.
Today the index data has been published Empire manufacturing from New York, showing that the activity continued to decrease in Aprilbut slightly improving expectations. The indicator has improved 11.9 points in April, standing at -8.1 from March 20, and from -14.5 estimated points.
Before the important speech of Jerome Powell, president of the US Federal Reserve that will take place tomorrow, today will speak Lisa D. Cook, a member of the entity, being able to give clues about the orientation of monetary policy at the May meeting.
Regarding Mexico, the US Department of Commerce announced yesterday that it will impose a tariff of 20.91% to Mexican tomatoes as of July 14pointing out that this measure will serve to protect US producers from unfair import prices.
USD/MXN Price levels
The relative force index (RSI) of 14 points to a very short -term correction after being strongly overexed in the hour graph, although in broader graphics, it still points down, with space for greater falls.
To continue falling, next Important support waiting at 19.83, minimum of 2025 registered on April 3. Below this level, the USD/MXN can find support around 19.75, where are the soils of November 2024.
Upwards, the first resistance zone between the mobile socks of 100 periods in daily graphic and one hour between 20.38 and 20.32. We would have to see a clear breakdown of these levels to see greater profits in the direction of last week at 21.08.
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.
