- The Mexican weight gains ground at the end of the session while the merchants digest Trump’s changing tariff approach and the imminent tariffs on Mexican tomatoes.
- Sheinbaum continues the conversations to avoid high tariffs; US will impose a 20.91% tariff to Mexican tomatoes from July 14.
- Merchants are attentive to inflation and retail data of Mexico, while retail sales and US unemployment applications remain and
The Mexican peso invested its course and fell against the US dollar at the end of the American session, without a catalyst behind this movement, since market participants digest Trump’s tariff rhetoric, which lately has insinuated to make exceptions for semiconductors and electronics. At the time of writing, the USD/MXN rises above the figure of 20.00 and earns more than 0.12%.
The president of Mexico, Claudia Sheinbaum, continued to negotiate with her American counterpart to avoid the tallest Trump tariffs. At the same time, the US Department of Commerce announced that the tomatoes imported from Mexico to the US will be subject to tariffs of 20.91% as of July 14.
Meanwhile, Reuters revealed that a report suggests that Honda de Japan is considering relocating part of its car production to the US to avoid tariffs.
On the other side of the border, the economic agenda revealed that the import prices of the US fell in March due to the decrease in energy prices, as the US Department of Labor showed on Tuesday. According to analysts cited by Reuters, the effects of tariffs have not felt.
On the agenda, Mexico will present retail sales, inflation of mid -April and economic activity of February. In the US, retail sales will also be presented on Wednesday, followed by housing data and initial unemployment applications.
What moves the market today: the Mexican weight affected by tariff
The retail sales of Mexico in January were 0.6% monthly and 2.7% year -on -year. If Wednesday’s data fall below those figures, it would be another sign that the economy is slowing down, as mentioned by the governor of the Bank of Mexico (Banxico), Victoria RodrÃguez Ceja.
Before the Senate, Victoria RodrÃguez Ceja said that the Governing Board is not yet satisfied with the inflation rate, which stood at 3.8% year -on -year in March, although far from the objective of 3%. He added that the process of disinflation and economic deceleration justify the moderate approach of Banxico and suggested that the Central Bank could continue to soften the policy.
This would keep USD/MXN backed, since the difference in interest rates between Mexico and the US will be reduced. For the next meetings, Banxico is expected to reduce the rates in 50 basic points (PBS), while the Federal Reserve (Fed) hinted that they will keep the rates without changes.
The monetary market participants had discounted 85 PBs of relief towards the end of 2025. The first cut is expected to be in July.
It is expected that US retailer sales will increase 1.3% month by month, compared to 0.2% in February. Meanwhile, it is projected that industrial production contracts 0.2% month by month, compared to an expansion of 0.7% for the same period.
TECHNICAL PERSPECTIVE OF USD/MXN: The Mexican weight depreciates as the USD/MXN exceeds 20.00
The USD/MXN bullish trend remains alive, however, the exotic pair briefly fell below 20.00, near the simple mobile average (SMA) of 200 days in 19.86. However, it seems to be prepared to close the day above 20.00, racing the way for buyers to push the highest prices.
If buyers carry the exotic pair beyond the maximum of April 14, 20.29, the following resistance would be the confluence of the 50 and 100 days SMA about 20.30/36, followed by the figure of 20.50. Once this obstacle was overcome, the next stop would be the daily peak of April 9, 21.07. On the contrary, if the USD/MXN falls below 20.00, look for a 200 -day SMA test in 19.86.
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.
