- Mexican bizo decreases with the height of the dollar/MXN above 20.50 as trade tensions between the United States and Mexico ease.
- Mixed investment data and expected prices in the Pancico rate reduced more pressure on the Mexican bizo.
- The White House shows commercial measures with Mexico, focusing on drug control efforts.
The Mexican Biso (MXN) decreased for the second day in a row against the US dollar (USD) with the start of the commercial war concerns. The optimistic functions of the United States (the United States) presses the Mexican currency, which has failed to take advantage of the US dollar’s weakness. USD/MXN is traded at 20.57, an increase of 0.45 %.
The Mexico’s economic list revealed the mixed total fixed investment numbers in November. The data emphasizes the constant economic slowdown and undermines the already struck Mexican bizo, which can weaken more as it is expected to reduce the Panco de Mexico (Pancico) of interest rates by 25 basis points from 10 % to 9.75 % on Thursday.
Although trade conflicts between the United States and Mexico have found a common ground, US dollar traders/MXN must know that there is a temporary stop for 30 days and that tensions may arise throughout the end of February. Peter Navarro, the White House commercial advisor, said that Canada is misunderstood because it is not a “commercial war” but a drug war.
Therefore, the customs tariff for Mexico will remain suspended if the government improves its battle against drug gangs.
In the United States, data maintains Greenback on the back foot. The Institute of Supply Management (ISM) revealed that the commercial activity in the American services sector was cooled in January. Other data showed that the job market is still strong as traders are preparing to issue US non -agricultural salary numbers on Friday.
Daily Digest Market Movers: Mexican bizo is still heavy amid wide weakness in US dollars
- The total fixed investment in Mexico increased by 0.1 % in November, a decrease from 0.3 % in October, but exceeded expectations by -0.1 %. On an annual basis, improved -2.6 % decreased to -0.7 %.
- Business confidence in Mexico in January showed signs of improvement, although commercial activity has been contracted, according to S& P Global. The manufacturing sector was contracted for the seventh month in January, indicating that the economy is slowing down
- Pancico’s Economic Questionary Series showed that Mexico’s economy is expected to grow by 1 % in 2025, a decrease from 1.2 % in the December poll. The inflation is expected to increase from 3.80 % to 3.83 %, while the basic prices are expected to be 3.74 %, up from 3.72 %.
- Economists estimate the exchange rate of the US dollar pair/MXN to end the year at 20.90, an increase of 20.53 in December, and estimates 150 basis points of mitigating Pancico.
- The changing of the American national employment ADP in January grew from 176 kilos to 183 kilos, and exceeds the estimates of 150 kilos.
- The PMI Service Services Index rose, for the same period as ADP, 52.9 and exceeded 52.8 expectations, but it was declined compared to 54.0 in December.
- S & P Global Services PMI for January, which decreased from 56.8 to 52.9, better than 52.8 expected.
- Money market prices in the money market are prices at 52 basis points (BPS) of mitigation with federal reserve solutions in 2025.
Technical expectations USD/MXN: Peso Mexican weakens 20.50, as buyers target 20.90
USD/MXN rose 0.265, recovering from the lowest weekly level 20.30 on Monday. However, the inability of buyers to achieve a daily closure is less than the simple 50 -day moving average (SMA) of 20.41 sponsored by Back recovery at the expense of the bizo.
For the upscale appeal, buyers must wipe the peak from the year to the date of (YTD) of 20.90, before No. 21.00. The bullish trend over the peak of the current YTD 21.29.
On the contrary, if the USD/MXN sellers pay less than 20.30, it may decrease to SMA for 100 days at 20.15. Before the number 20.00.
Pancico is common questions
Mexico Bank, also known as Pancico, is the central bank in the country. Its mission is to maintain the value of Mexico, Mexican Peso (MXN), and control of monetary policy. To this end, its main goal is to maintain low and stable inflation within the target levels – at or close to its 3 % goal, the center point in the tolerance range ranges between 2 % and 4 %.
The main tool for banknotes for monetary policy guidance is to determine interest rates. When inflation is higher than the target, the bank will try to tame it by raising prices, which makes it more expensive for families and companies to borrow money and thus cool the economy. The highest interest rates are generally positive for Mexican Peso (MXN) because it leads to higher returns, making the country a more attractive place for investors. On the contrary, low interest rates tend to weaken MXN. The difference in the average with the US dollar, or how Banxico is expected to determine interest rates compared to the Federal Federal Reserve (Fed), which is a major factor.
Pancico meets eight times a year, and its monetary policy is greatly affected by the US Federal Reserve decisions (Fed). Therefore, the Central Bank Resolution Committee usually gathered a week after the Federal Reserve. When doing this, Pancico interacts and sometimes expects monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before raising the federal reserve rate, Pancico was first trying to reduce the chances of a significant decrease in the Mexican Bzo (MXN) and to prevent capital flows that could shake the country.