The Mexican Peso remained under pressure against the US Dollar, trading at 20.23, amid concerns over trade policies and disappointing economic data. Mixed indicators, including a contraction in economic activity in February and a decrease in private spending, contributed to the Peso’s decline.
The Citi Mexico Expectations survey indicated a consensus for a 50 basis points cut by the Bank of Mexico at the upcoming meeting. Analysts expect the primary reference rate to drop to 8% by 2025, while inflation is projected to rise slightly to 3.80% YoY in March.
Market Sentiment And Us Federal Reserve
The US Federal Reserve’s recent decisions and statements also impacted market sentiment, with no significant economic data released on Friday. Traders await upcoming US inflation indicators, which may further influence the Peso’s performance.
Technical analysis shows the USD/MXN struggling near resistance levels at 20.30, with key support at 20.00 and a yearly low of 19.84. The outlook suggests a potential for further increases if the Peso can break resistance.
The Peso’s sluggish performance against the US Dollar has been driven by investor concerns over economic conditions and policy shifts. We see the currency still battling against external pressures, with February’s contraction in activity and a pullback in private expenditure reinforcing the market’s caution. Investors had expected steadier fundamentals, but these figures have only deepened uncertainty.
Survey results from Citi Mexico show that there’s broad agreement on the central bank trimming rates by half a percentage point at the next meeting. Market participants anticipate that borrowing costs will gradually fall to 8% by the following year. At the same time, inflation is forecast to tick up slightly, reaching 3.80% on a yearly basis for March. While this level remains relatively contained, any further uptick could complicate rate decisions moving forward.
Technical Analysis And Resistance Levels
Monetary policy decisions in the US continue to shape global sentiment. The Federal Reserve’s latest commentary has already had an effect, even with no major American economic figures from Friday. Many traders are now shifting their focus toward inflation data due later this week, which could bring about fresh volatility. A stronger-than-expected inflation reading would weigh on the Peso further, whereas softer numbers could offer it some relief.
Examining price movements from a technical standpoint, we see the Peso hovering near resistance at 20.30. This threshold has contained upside moves recently, leaving traders watching closely for a possible break. Meanwhile, support rests at 20.00, with an even more notable floor sitting at 19.84, the lowest level so far this year. If selling pressure intensifies, these support levels may come into play, though should the Peso manage to push through resistance, further gains in USD/MXN would remain on the table.
