- The USD/MXN records its first day of profits after three days followed by losses.
- The US dollar bounces with Reuters information that states that China will eliminate tariffs on American ethane.
- The consumer’s confidence of the Board Conference falls to its lowest level in five years, while Jolts employment offers descend to minimums since 2021.
- Donald Trump is expected to announce a moderation of tariffs to the automobile sector
The USD/MXN moves this Tuesday in a narrow range. In the European morning, the pair rose to a daily maximum of 19.64 and then fall to a minimum of the day at 19.54. In the last minute, the par quotes over 19.60, winning 0.07% daily.
The US dollar bounces up with the latest news about tariffs despite the weak US data
Reuters has reported in the last minutes that China has decided to eliminate the 125% tariff on the imports of the United States tax earlier this month. The news has rushed the index of the US dollar (DXY), which has risen around 99.20 and moves now over 99.16, winning 0.23% in what we have been in time.
The Possible descales in the commercial war between China and the United States has caused the dollar to ignore the weak data published in the US. This Tuesday. First, the Conference Board’s consumer trust has fallen to 86 points in April From March 93.9, showing its worst reading in five years, since April 2020. On the other hand, the March Jolts employment offers have descended to 7.19 million From the February 7.48 million, below the 7.5 million planned by the market.
In the next few hours, Donald Trump is expected to announce a moderation in tariffs that affect the automobile sector. In the celebration of his 100 days as president, the president is visiting Michigan, where he will meet workers in the sector.
Mexico will publish its Preliminary figures of the Gross Domestic Product (GDP) of the first quarter. In the fourth quarter of 2024, the economy showed a decrease in 0.6% intertrrimestral while annually grew 0.5%.
USD/MXN Price levels
The trend is inclined downward in short -term graphics although it points to a correction, while in the long term the bias is neutral.
In case of extending the correction, the first resistance appears in 19.75, maximum of last week. Above the psychological zone of 20.00 and the mobile average of 100 in daily graph about 20.31.
Down, the PAR would have to break below the minimum of 2025 tested on Wednesday, April 23 in 19.46 to extend its fall around 19.11/19.06, October and September soils, 2024, respectively. A break in the psychological zone of 19.00 could lead to the surroundings of 18.40, where it is the minimum of August.
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.
