- The Mexican peso shoots while the USD/MXN falls 1.14% in the middle of a weaker US dollar.
- Trump and Sheinbaum describe the call as “very productive,” improving feeling and reducing short -term tariff risks.
- The USD weakens while Trump criticizes the fed delayed rates cuts, citing the fall in oil and food prices.
The Mexican peso recovered against the US dollar on Thursday after the US president Donald Trump, and the president of Mexico, Claudia Sheinbaum, maintained a phone call that both described as “very productive.” This and a weaker dollar made the USD/MXN move down, quoting 19.69, with a drop of 1.14%.
Operations in Mexico are closed in observance of Easter holidays. Although the economic agenda of Mexico was absent this week, it will charge impulse next week with the publication of retail sales, inflation in the middle of April and economic activity data.
Until now, Mexico has dodged additional tariffs that have already been imposed since March 4, when Trump imposed 25% tariffs on most imports, including steel, aluminum, cars and car parts. On April 14, the White House decided to apply 21% tariffs to tomatoes.
On the other side of the border, the president of the USA, Trump, complained about the president of the Federal Reserve (Fed), Jerome Powell, saying that the Fed is “too late” to cut rates due to the decrease in oil prices and food.
US employment data and construction permits exceeded expectations. On the contrary, the beginnings of housing fell, indicating that housing construction is slowing down.
On the agenda, Mexico will present retail sales, inflation in the middle of April and the economic activity of February until next week.
What moves the market today: the Mexican weight advances in the middle of an absent economic agenda
- As Governor Victoria Rodríguez Ceja said, the Bank of Mexico (Banxico) is ready to continue flexible politics. However, a slowdown in retail sales and inflation figures would justify an interest rate cut of 50 basic points by Banxico at the May meeting.
- The economic activity indicator of Mexico, which shows monthly growth figures, would further confirm the decision of Banxico. In January, the activity contracted -0.2% in monthly terms and -0.1% in annual terms.
- If the data is softer, Banxico could reduce the rates as expected, cutting the differential of interest rates between Mexico and the US. Although this should be positive for the US dollar, sending the USD/MXN to a recovery, the uncertainty in the markets and traders leaving the US dollar could limit the bullish potential of the exotic par.
- Initial unemployment applications in the US for the week that ended on April 12 were 215K, lowering 224k and below the 225K forecast, an encouraging signal for the labor market.
- Construction permits in the US increased 1.6%, from 1,459 million to 1,482 million, exceeding 1.45 million expectations. However, the beginnings of housing disappointed, falling abruptly from 1,494 million to 1,324 million, indicating weakness in the activity of residential construction.
- The monetary market participants had discounted 8 basic FED flexibility points towards the end of 2025. The first cut is expected to be in July.
TECHNICAL PERSPECTIVE OF USD/MXN: The Mexican weight is recovered while the USD/MXN falls below the 200 -day SMA
The USD/MXN bullish trend is questionable, with vendors sending the downward torque below the figure of 20.00 and overcoming the simple mobile average (SMA) of 19.87. The relative force index (RSI) became bassist, so an additional confirmation of a daily closure below the 200 -day SMA would pave the way to challenge the 19.50. In that case, the following support would be the figure of 19.00.
On the contrary, if buyers push the USD/MXN exchange rate above 20.00, this could open the door to try the maximum of April 14, 20.29, which would open the door to the confluence of the 50 -day SMA and 100 days about 20.29–20.35, followed by the resistance of 20.50.
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.
