The Mexican Peso prolongs its agony against the US Dollar and dips some 0.16% during the North American session, hurt by market mood deterioration as investors flock to safe-haven currencies. The official nomination of former President Donald Trump as a Republican Candidate and remarks linked to Mexico could be one of the reasons behind the USD/MXN advance, which traded at 17.99 above its opening price by 0.16%.
Sentiment remains sour, as depicted by worldwide indices trading with losses. The Mexican economic docket will gather pace next Monday, July 22, with the release of May's Economic Activity alongside Retail Sales for the same period. This, in turn, has left market participants adrift to US Dollar dynamics.
Across the border, Trump’s comments put Mexico in the spotlight, commenting that he will end illegal immigration “by closing the border and completing the wall.” He added, “China and Mexico have taken 68 percent of our automotive industry, but we are going to get it back.”
The remarks threaten to prevent companies from relocating to Mexico, which could weaken the Mexican Peso.
Meanwhile, Fitch ratings reaffirmed Mexico’s BBB- qualification with a stable outlook, though added that the proposed judicial reform would impact the country. The credit rating agency stated there’s uncertainty in the upcoming administration to narrow the fiscal deficit, expects a slight economic downturn in 2025, and added that trade tensions with the US could leave Mexico vulnerable.
A light US economic schedule will feature New York Fed President John Williams and Atlanta’s Fed President Raphael Bostic.
The US Dollar Index (DXY), which tracks the buck’s value against the other six currencies, climbed back above 104.30, gaining 0.12%.
The USD/MXN has jumped off the floor formed at around 17.58-17.60 amid traders' nervousness about former President Trump's “upcoming” victory as they ditch the Mexican currency. Since Thursday, the exotic pair has gained 1.50% and challenged the psychological 18.00 figure but has failed to print a daily close above the latter.
If USD/MXN extends its gains above the psychological 18.00 figure, that will expose key resistance levels. Once breached, the next stop would be the July 5 high at 18.19, followed by the June 28 high of 18.59, allowing buyers to aim for the YTD high at 18.99.
On further weakness, if USD/MXN clears the 50-day SMA at 17.63, that would pave the way to challenge the December 5 high at 17.56, followed by the 200-day SMA at 17.27. Further losses would test the 100-day SMA at 17.21.
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
© 2000-2024. Bản quyền Teletrade.
Trang web này được quản lý bởi Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
Thông tin trên trang web không phải là cơ sở để đưa ra quyết định đầu tư và chỉ được cung cấp cho mục đích làm quen.
Giao dịch trên thị trường tài chính (đặc biệt là giao dịch sử dụng các công cụ biên) mở ra những cơ hội lớn và tạo điều kiện cho các nhà đầu tư sẵn sàng mạo hiểm để thu lợi nhuận, tuy nhiên nó mang trong mình nguy cơ rủi ro khá cao. Chính vì vậy trước khi tiến hành giao dịch cần phải xem xét mọi mặt vấn đề chấp nhận tiến hành giao dịch cụ thể xét theo quan điểm của nguồn lực tài chính sẵn có và mức độ am hiểu thị trường tài chính.
Sử dụng thông tin: sử dụng toàn bộ hay riêng biệt các dữ liệu trên trang web của công ty TeleTrade như một nguồn cung cấp thông tin nhất định. Việc sử dụng tư liệu từ trang web cần kèm theo liên kết đến trang teletrade.vn. Việc tự động thu thập số liệu cũng như thông tin từ trang web TeleTrade đều không được phép.
Xin vui lòng liên hệ với pr@teletrade.global nếu có câu hỏi.