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MEXICO: USDMXN Edging Lower as Equities Extend Bounce

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • Elevated levels for major equity indices have likely been supportive of the broader dollar offer across the US session, with the notable climb for EURUSD back towards the week’s highs evidence of the softer greenback sentiment.
  • In tandem, USDMXN has moved steadily lower from the 20.80 highs, to ~20.58 at typing. This pullback brings the pair back into the middle of the 2025 range, with spot remaining volatile, but still respecting the short-term technical parameters of 20.00-20.90.
  • Assisting the peso bounce may be the general belief that Trump’s initial intention of imposing 25% tariffs may be the beginning of a negotiating process, sentiment which was echoed by the former Mexico USMCA negotiator Kenneth Smith earlier today. Going further, Smith described the US as needing Mexico and China in order to compete with China.
  • As noted, we have Mexico inflation data headlining the local economic calendar, a potentially pivotal data point for a central bank committee that has hinted towards accelerating the easing pace at coming meetings. Additionally, we still await the replacement on the Banxico board for Irene Espinosa, something that is expected to be announced before the end of the month.
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  • Elevated levels for major equity indices have likely been supportive of the broader dollar offer across the US session, with the notable climb for EURUSD back towards the week’s highs evidence of the softer greenback sentiment.
  • In tandem, USDMXN has moved steadily lower from the 20.80 highs, to ~20.58 at typing. This pullback brings the pair back into the middle of the 2025 range, with spot remaining volatile, but still respecting the short-term technical parameters of 20.00-20.90.
  • Assisting the peso bounce may be the general belief that Trump’s initial intention of imposing 25% tariffs may be the beginning of a negotiating process, sentiment which was echoed by the former Mexico USMCA negotiator Kenneth Smith earlier today. Going further, Smith described the US as needing Mexico and China in order to compete with China.
  • As noted, we have Mexico inflation data headlining the local economic calendar, a potentially pivotal data point for a central bank committee that has hinted towards accelerating the easing pace at coming meetings. Additionally, we still await the replacement on the Banxico board for Irene Espinosa, something that is expected to be announced before the end of the month.