- Mexican peso is firm, despite consumers' weak confidence data, as concentration is still a broader risk indicator.
- The talks between the United States and China for Saturday are still a critical subject of peso and EM currencies
- USD/MXN eyes fed performers before the upcoming Banxico meeting
The Mexican Peso (MXN) will strengthen the US dollar (USD) on Friday at the European session, as Federal Reserve performers and US-China trade speeches hide weak consumer confidence data from Mexico in April.
During this writing, the USD/MXN is trading near 19.503, which is 0.11%, and further moving steps, probably driven by the displacement of sentiments around Fed -political signals, domestic economic data and global trade developments.
Mexican consumer confidence falls in April, signaling the softer domestic prospects
The Mexican National Institute of Statistics and Geography (Ingi) announced a sharp decline in consumer trust, with the title index falling to 45.5 in March with 64.1.
The seasonally adapted indicator also fell to 45.3, below 46.0. The index reflects the feelings of households in finance, job prospects and a wider economy, the main thrust of domestic demand.
Despite a sharp decline, USD/MXN showed a little reaction. Markets have largely estimated the weakest domestic prospects, especially in the midst of growing expectations next week (May 15) 25-50 Basic points in the Banikoting rate.
In addition, the investor is still focusing on external risks, including the differences in global interest rates and continuing tensions of US-Mexico trade. In the dominant directions of these wider macro drivers, the soft confidence of consumers is considered to be more affirmed rather than a new catalyst.
Fed focus as the markets weigh the political discrepancy
Another major USD/MXN leader is the difference in interest rates and the political difference between Banxico and the Federal Reserve. As central banks are still focusing on the control of inflation, the markets today monitor FED officials today after several speech series after their decision to leave US interest rates stable on Wednesday.
The USD/MXN pair is likely to be led by a timetable packed on Federal Reserve performers on Friday, including the main voting members, including governors Adriana Kugler, Lisa Cook and Christopher Waller, who convey comments that may affect US monetary policy expectations. Markets are particularly sensitive to any Hawk signal, in the middle of the constant uncertainty about Fed's next move.
Well -known calls such as Kugler and Musalem can tilt for hours towards a stronger US dollar (USD) if they strengthen the case than it is longer.
At the same time, at the Hoover Monetary Policy conference, several performances will increase the opportunity to coordinate or strengthen messages about the inflation and tariff strategy.
Mexican Peso Daily Digest: USD/MXN key topics
- The Mexican April inflation report released on Thursday showed an acceleration of price growth to 3.93% exceeding 3.90% forecast. Nuclear inflation increased by 0.49% MOM, compared to March 0.43% and exceeded expectations by 0.47%.
- The surprise of both the title and the main figures is permanent pressure pressure.
- As inflation is in the central bank's target range of 2-4%, the markets are widely expected to have Banxico cutting tariffs next week.
- During the weekend, Treasury secretary Scott Besent and Jamieson Greer will meet with Swiss Chinese officials to discuss trade, tensions between the world's largest economy have remained a key person for the risk of risks
- As a currency of the evolving market (EM), the peso is a hypersensitive to global range and trade dynamics. As about 80% of Mexican exports go to the United States and China, the main supplier of intermediate goods is, the peso is particularly vulnerable to the risk of goods and investor appetites.
- Recent US tariff announcements on aluminum, steel and cars – as well as the potential of additional fees outside the USMCA – has been concerned about Mexican growth and has added economic uncertainty.
USD/MXN Technical Setup: Bear pressure remains below 19.60
The USD/MXN is under pressure, traded slightly over the key support at 7:50 pm, and the wider trend still points to lower.
The couple struggles to reclaim a 10-day simple moving average (SMA) at 7pm, which continues to act as a dynamic resistance.
Price action has been a trend that descends since the fall of April, strengthening the bear.
To achieve Bulls traction, the movement and pause of 10-day SMA may be over 19.60 psychological levels to give the USD/MXN an opportunity to continue at high levels of May 19.78.
Meanwhile, moving less than 19.50 and close to every day, below the lowest lowest in April, could be exposed to 19.47.
The Relative Strength Index (RSI) with 38.35 refers to Kanders without being overwritten, indicating that the sellers are still in room to control, unless the basic catalyst triggers reversal.
USD/MXN daily chart
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In the world of financial plates, two widespread concepts of “risk” and “risks” refer to the risk level that investors are willing to be on the stomach during the period referred to. In the “risk” market, investors are optimistic about the future and want to buy risky assets. “Out -of -risk” in market investors is that they are still confident if they are in the future when they are tied up when they are tied to that they are “. Modest.
Usually, stock markets increase during risk periods, including most of the gold value, including the raw materials, as they benefit from a positive growth prospect. The currencies of heavy goods exporters are strengthened due to increased demand and cryptocurrency. In the out-of-risk market, the bonds are raised-large government bonds-golden golden currencies, such as Japanese yen, Swiss frank and US dollar.
Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD) and Minor FX Like Rubles (RUB) and South African Beach (ZAR), everyone tends to rise in the markets “risk”. This is due to the fact that the economies of these currencies are largely dependent on commodity exports for growth and goods tend to increase the price during the risk periods. This is due to the fact that investors will see more demand for raw materials due to increased economic activity in the future.
The main currencies that tend to rise during the risk periods are the US dollar (USD), Japanese yen (JPY) and Switzerland Franc (CHF). The US dollar because it is the world reserve currency, and because during the crisis, investors buy us a public debt that is considered safe because the world's largest economy is unlikely to pay. Yen, due to the increased demand for the Japanese government bonds, as there are major partly domestic investors who are unlikely to throw them – even in crisis. Swiss Frank, as strict Swiss banking laws provide investors with increased capital protection.
