- USD/MXN rises to daily highs at 17.26.
- The price of the Dollar measured by the DXY Index loses strength but remains above 103.00.
- The focus of investors today is on unemployment data from Mexico and GDP and durable goods requests from the United States.
USD/MXN has rebounded on Thursday after yesterday's drop to three-day lows at 17.13. The pair has advanced today from 17.21 to 17.26, a new daily high, trading at the time of writing above 17.24, gaining 0.07% daily.
The price of the dollar gives ground while awaiting key data from the United States
He Dollar Index (DXY) has weakened in the European morning on Thursday due to the cautious mood of the markets regarding a possible rate cut by the Fed in March. The USD rose in the Asian session to 103.40, but in the European morning it has fallen to 103.16, a daily low.
Bets on a Federal Reserve rate cut were sharply reduced at the beginning of this week, but experienced a slight rebound yesterday, putting investors on guard. The FedWatch tool has lowered the options for a rate cut in March again today, placing it at 42.4% compared to the 44.3% set yesterday.
Mexican Peso operators will be very attentive today to Mexico's unemployment data for the month of December, expecting a drop to 2.6% from 2.7% in November. For its part, the United States publishes a battery of important data led by the advanced GDP for the fourth quarter, which is expected to have slowed to 2% after showing a growth of 4.9% in the third quarter of the year. Durable goods orders for December will also be relevant, although an increase of 1.1% is expected, lower than the 5.4% seen the previous month. Finally, the Chicago Fed activity index and weekly jobless claims will offer a more complete picture of the state of the US economy.
Read – US GDP Preview: Economic growth to slow after successful third quarter
USD/MXN Price
The trend remains neutral on hourly charts, with a bullish bias in four hours and a bearish bias in broader time frames, as can be seen in daily and weekly charts.
An advance of the momentum registered in the last hours will find an initial barrier at 17.38, the monthly maximum of January tested on the 17th and 23rd. Above this level awaits the resistance located at the December ceiling at 17.56.
The extension of the bearish movement will gain momentum if it extends to the psychological zone of 17.00. A break of this level will target the support established at 16.78, the five-month low recorded on January 8.
One day chart
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Frequently Asked Questions about the Mexican Peso
What is MXN?
The Mexican Peso is the legal tender of Mexico. The MXN is the most traded currency in Latin America and the third most traded on the American continent. The Mexican Peso is the first currency in the world to use the $ sign, prior to the later use of the Dollar. The Mexican Peso or MXN is divided into 100 cents.
What is Banxico and how does it influence the MXN?
Banxico is the Bank of Mexico, the country's central bank. Created in 1925, it provides the national currency, the MXN, and its priority objective is to preserve its value over time. In addition, the Bank of Mexico manages the country's international reserves, acts as a lender of last resort to the banks and advises the government economically and financially. Banxico uses the tools and techniques of monetary policy to meet its objective.
How does inflation impact the MXN?
When inflation is high, the value of the Mexican Peso (MXN) tends to decrease. This implies an increase in the cost of living for Mexicans that affects their ability to invest and save. At a general level, inflation affects the Mexican economy because Mexico imports a significant amount of final consumption products, such as gas, fuel, food, clothing, etc., and a large amount of production inputs. On the other hand, the higher the inflation and debt, the less attractive the country is for investors.
How does the Dollar influence the Mexican Peso (MXN)?
The exchange rate between the USD and the MXN affects imports and exports between the United States and Mexico, and may affect demand and trade flows. The price of the Dollar against the Mexican Peso is affected by factors such as monetary policy, interest rates, the consumer price index, economic growth and some geopolitical decisions.
How does the Fed's monetary policy affect Mexico?
The exchange rate between the USD and the MXN affects imports and exports between the United States and Mexico, and may affect demand and trade flows. The price of the Dollar against the Mexican Peso is affected by factors such as monetary policy, interest rates, the consumer price index, economic growth and some geopolitical decisions.
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.
