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U.S. Dollar / Mexican Peso

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2 reasons the peso rally may not be over The USD/MXN has fallen over 2.5% in the past five trading sessions, dropping below 19.9 per USD for the first time since November 2024. Two key factors could be driving this move: 1. Investor distrust in the U.S. dollar – Market confidence is weakening due to Trump’s inconsistent tariff threats and other unpopular policies. In contrast, the Sheinbaum government’s kid-glove handling of Trump is securing favourable trade concessions. 2. Attractive interest rate differential – With Banxico’s benchmark rate at 9.5%, the peso remains appealing for carry trades. The Federal Reserve’s decision this week could widen this gap further. Last week’s subdued U.S. inflation data is helping to fuel speculation of earlier Fed rate cuts, which may continue to support the peso despite trade uncertainties.
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by BlackBull Markets
Mexican Peso Shows Resilience Despite ChallengesThe Mexican peso advanced 0.35% during the session, demonstrating remarkable resilience amid negative signals from the Mexican industrial sector and economic uncertainties in the United States. However, the near-term outlook for the currency presents considerable challenges. In Mexico, recent industrial data has raised concerns among investors. The Monthly Indicator of Industrial Activity (IMAI) fell 0.4% in January, accumulating an annual decline of 2.8%. The most significant deterioration came from the mining and extraction sector, particularly oil and gas, which saw sharp contractions of 8.8% and 10.7%, respectively. Additionally, the construction sector remained weak with an annual drop of 6.7%, while manufacturing declined slightly by 0.8%, with textiles, machinery, and metal goods suffering the most pronounced losses. On the international front, the recent moderation in U.S. inflation has provided some support to the Mexican peso. The Producer Price Index (PPI) remained unchanged in February, coming in below market expectations. Additionally, the recent slowdown in the U.S. Consumer Price Index (CPI), which fell to an annual rate of 2.8%, reinforces expectations of a potentially more dovish Federal Reserve. This scenario could benefit emerging market currencies, including the Mexican peso. However, significant risks remain. Global trade tensions and concerns about a potential U.S. recession could drive an increase in risk aversion, negatively impacting the peso in the short term. Market attention will be focused on the upcoming Federal Reserve monetary policy decision. A dovish stance would clearly favor the peso, while a more aggressive monetary approach would strengthen the U.S. dollar, putting additional pressure on the Mexican currency. For now, the peso has shown resilience, but it will navigate cautiously while awaiting clarity on these key fronts. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
USDMXN: Mexican Peso Gains Strength and Approaches Key SupportOver the last six trading sessions, the USD/MXN price has dropped more than 3.5% as the Mexican peso has regained ground lost due to the ongoing conflict between Mexico and the White House. For now, the bearish bias has been driven by the March 6th extension on the tariff imposition, which gave the Mexican government a reprieve until April 2nd. This has allowed the Mexican peso to maintain a steady uptrend in the short term, sustaining selling pressure on USD/MXN. Lateral Range: Since early November 2024, USD/MXN has been oscillating within a sideways range, marked by a ceiling at 20.89 pesos per dollar and a floor at 20.07 pesos per dollar. The current bearish bias has pushed the price back to the lower boundary of the channel, and the weakening momentum of the last few sessions could reinforce the support barrier that remains intact. ADX Indicator: The ADX line has started showing consistent neutrality near the 20 level, suggesting that recent movements lack strong trend direction. This indicates that neutrality may persist as the price continues approaching the support level. MACD Indicator: The MACD histogram shows a similar scenario, with oscillations remaining very close to the neutral 0 level. This reinforces the current indecision in the market as the price approaches the support zone. Key Levels: 20.43: Near-term resistance zone, aligning with the midpoint of the broad sideways range and converging with the 50- and 100-period simple moving averages. Sustained oscillations above this level could keep the sideways range active in the long term. 20.07: Crucial support zone, located at the lower boundary of the broad sideways range. Consistent oscillations below this level could break the current range and pave the way for a more prolonged bearish move in the coming sessions. 20.89: Distant resistance zone, marking the upper boundary of the sideways channel. If the price reaches this level, it could reactivate the forgotten uptrend. By Julian Pineda, CFA – Market Analyst
by FOREX.com
USDMXN at Key Support Level - Potential Buy SetupFOREXCOM:USDMXN has reached a significant support zone, highlighted by previous price reactions and strong buying interest. This area has historically acted as a key demand zone, increasing the likelihood of a bounce if buyers step in. The current market structure suggests that if the price confirms support within this zone, we could see a bullish reversal. A successful rebound could push the pair toward the 20.49000 level, a logical target based on past price behavior and structural confluence. Just my take on support and resistance zones—not financial advice. Always confirm your setups and trade with solid risk management. Best of luck!
Long
by TrendDiva
11
USD/MXN: Mexico plans response to US tariffs The White House confirmed a one-month exemption for autos under the USMCA (United States-Mexico-Canada Agreement), following President Trump’s 25% tariffs on Mexican imports. The exemption has significant consequences for Mexico’s economy, with tariffs expected to add billions in costs for automakers that rely on Mexican production. Mexican President Claudia Sheinbaum plans to discuss tariffs with Trump on Thursday, before her government announces countermeasures on Sunday. Meanwhile, the MACD indicator initially showed a potential bullish signal as moving averages crossed upward. However, momentum appears to be fading, and the pair has yet to retest its February 3rd highs.
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by BlackBull Markets
USD/MXN: The Mexican Peso Weakens as New Tariffs Take EffectOver the last three trading sessions, the pair has risen by more than 2% in favor of the U.S. dollar as the threat of tariffs has become a reality. So far, President Trump has confirmed that the measures will take effect today, and there is currently no hope for another deadline extension. The President of Mexico has traveled to the United States for an official meeting, but at this time, there are no expectations that the measure will be lifted in the short term. Given this, investors have determined that the U.S. dollar is likely the strongest currency to consider, especially if there is a potential economic slowdown in Mexico’s activity in the coming months. Consistent Sideways Range For now, USD/MXN remains in a sideways range, defined by a ceiling at 20.91 pesos per dollar and a floor at 20.07 pesos per dollar. The recent bullish momentum has once again tested resistance, and if upward pressure on the U.S. dollar remains strong, it is possible that the sideways channel could give way to an uptrend, which has remained dormant. It is important to note that the latest candlestick in the formation shows strong neutrality, highlighting the barrier imposed by the current resistance level. ADX Indicator At the moment, the ADX line has started an upward trend and is now above the neutral level of 20 on the indicator. This suggests that the average of bullish movements in recent trading sessions is becoming trend-defining. However, it is crucial that the ADX line continues to move away from the neutral level to confirm that buying pressure is strengthening in the short term. Key Levels: 20.91: Major resistance, marking the upper boundary of the broad sideways range and acting as the most critical barrier for the latest bullish move. Breaks above this level could lead to new highs, ending the current consolidation phase. 20.43: Important support, aligning with the Ichimoku cloud barrier as well as the 50 and 100-period moving averages, highlighting the strength of this level. If the price falls below this point, the sideways range could extend further in the coming sessions. 20.07: Final support, positioned at the lowest price levels recorded in December 2024. If the price nears this zone, it could reinforce the bearish outlook, completely invalidating the long-term bullish trend. By Julian Pineda, CFA – Market Analyst
by FOREX.com
U.S. Tariffs Hit the Mexican Peso and Escalate Trade TensionsThe recent imposition of 25% tariffs by the United States against Mexico has generated significant pressure on the Mexican peso, which today has reached levels above 20.8 per dollar, marking yet another notable depreciation in 2025. This up to 1.5% increase at its daily high in the exchange rate reflects the uncertainty surrounding Mexico’s economic and trade outlook, especially considering that more than 80% of Mexican exports go to the United States. As the market has reiterated multiple times, a deterioration in trade relations between the two countries could result in serious consequences for Mexico’s economic development and financial stability. The immediate trigger of this volatility has been the implementation of punitive measures, which had been postponed after negotiations in which both Mexico and Canada agreed to address the issues of illegal migration and drug trafficking, though not to the extent that the White House deemed necessary. While Canada has already responded with tariffs on U.S. goods valued at $107 billion, President Claudia Sheinbaum has called a press conference to announce Mexico’s response to this situation. She is expected to unveil retaliatory measures this weekend, which, according to some analysts, could include tariffs on strategic U.S. products. This factor has kept investors and business leaders on edge, awaiting concrete definitions of the Mexican government’s course of action. While market sentiment had remained relatively stable until now, statements from U.S. President Donald Trump, declaring that “there was no room” for further negotiations, and the fact that the tariffs are directly linked to the fight against fentanyl, have created a cautious atmosphere. In addition, recent economic data—such as the eighth consecutive month of contraction in the manufacturing sector and the decline in business confidence in February—further complicate the outlook. This reinforces expectations that the Bank of Mexico will continue its monetary normalization process, which began in 2025 at a more aggressive pace with a 50-basis-point normalization. In this context, it is crucial to observe how the Mexican government responds to what many see as an escalation of the trade war. Personally, I believe the key will be balancing the need to protect the national economy with the urgency of avoiding an even greater confrontation. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
Long
by Pepperstone
USD/MXN Nears Critical Support LevelOver the past four trading sessions, USD/MXN has declined by more than 2% in favor of the Mexican peso. The current bearish move has brought the price closer to the lower boundary of the existing sideways range seen on the chart. This recent selling pressure has been driven by mixed U.S. inflation data released last week and the lack of volatility in the U.S. dollar due to the U.S. holiday, allowing the peso to dominate the market in the short term. Sideways Range Holds At the moment, USD/MXN continues to trade within a well-defined neutral range between the 20.90332 resistance level and the 20.09472 support level. So far, the bearish momentum has been strong enough to push the price closer to the key support zone, and as long as selling pressure persists, there is a higher likelihood of a downside breakout in the short term. MACD Indicator Currently, both the MACD lines and the histogram are crossing the neutral 0 level. This could signal the start of fresh bearish strength if price action remains below this level in the coming sessions. Selling pressure may gain further relevance as the histogram moves further away from the neutral zone. TRIX Indicator For the first time in months, the TRIX indicator is consistently approaching the 0 neutral level , reinforcing bearish dominance in the short term. If the TRIX crosses below 0, the moving average bias could shift fully bearish, strengthening the peso’s momentum. Key Levels to Watch 20.90332 – Key Resistance: Major resistance level, marking the highest price levels reached in recent months. A return to this level would confirm a recovery of bullish sentiment, reinforcing the current sideways channel. 20.43791 – Near-Term Resistance: Coincides with the Ichimoku Cloud barrier and the 50-period moving average. If the price retraces to this level, it could invalidate the current bearish pressure and open the door for a potential upside correction. 20.09472 – Critical Support: Lower boundary of the current range. If sellers break below this level, it could confirm the start of a new downtrend in the short term. By Julian Pineda, CFA – Market Analyst
by FOREX.com
USD/MXN: Testing Support Within a Tight RangeChart Analysis: USD/MXN remains stuck in sideways consolidation, with price action respecting both rising trendline support and overhead resistance at 20.80. 1️⃣ Support and Resistance Levels Holding: Key resistance at 20.80 has repeatedly capped rallies, preventing a breakout. Trendline support near 20.40 continues to hold, but a breakdown could open the door to further downside. 2️⃣ Moving Averages Provide Guidance: 50-day SMA (20.42): Acting as a dynamic support zone. 200-day SMA (19.28): Remains well below, reinforcing a longer-term bullish bias. 3️⃣ Momentum Indicators Show Lack of Conviction: RSI: 48.64, indicating neutral momentum with no clear direction. MACD: Barely above zero, reflecting a lack of strong trend momentum. What to Watch: A breakout above 20.80 could trigger fresh upside, targeting 21.00+. A break below 20.40 would signal a potential reversal toward the 20.00 handle. Sideways price action remains dominant, awaiting a catalyst for direction. USD/MXN continues to coil within a tight range, leaving traders watching for a decisive breakout or breakdown. -MW
by FOREX.com
Banxico Accelerates the Pace of NormalizationThe recent monetary policy decision by the Bank of Mexico (Banxico), which reduced the interest rate by 50 basis points to 9.5%, marks a significant moment in the current cycle of monetary normalization. Although the market consensus already anticipated a cut, the 50-basis-point magnitude reflects the majority of the Governing Board members’ confidence that domestic and external economic conditions allowed for a more substantial adjustment. It is worth noting that the vote was not unanimous, as Deputy Governor Jonathan Heath favored a smaller cut of 25 basis points. This move is in line with the message Banxico issued in December 2024, when it announced that if inflation trends remained favorable and economic conditions permitted, it would consider accelerating the pace of rate cuts. It is the first time in this cycle that the rate has been lowered by 50 basis points, following five 25-basis-point cuts in 2024. The inflation trend has been a key factor: with headline inflation finally falling below 4%—a level not seen since 2021—the central bank has additional room to ease monetary policy without losing sight of its 3% target. In addition to the positive news on prices, the Mexican economy is showing signs of weakness. During the fourth quarter of 2024, GDP contracted by -0.6% quarter-on-quarter, the first drop since 2021. Moreover, consumer confidence fell again, reaching 46.7 in January 2025, indicating increased caution in household spending. These factors, along with the temporary pause in tariffs by the United States, provided a relatively stable exchange environment that made a more aggressive cut feasible. Looking ahead, much of the effectiveness of this less restrictive monetary stance in boosting the economy will largely depend on the evolution of external risks, particularly trade negotiations with the United States. In this context, it will be crucial to monitor whether inflation remains within the target range and whether the peso maintains exchange rate stability. If new external pressures arise or inflation deteriorates, Banxico would very likely need to reassess the pace of upcoming cuts. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
Mexican Peso at a Key Monetary Policy MomentIn a global environment still marked by uncertainty, the Mexican peso is showing relative stability ahead of the imminent monetary policy decision by the Banco de México (Banxico). The expectation of a 50 basis points cut in the interest rate this month reflects a strategic calculation: to seize an opportunity to continue stimulating the economy while the relative exchange rate stability permits it. I personally believe that Banxico’s decision is based on two key factors. First, general inflation fell below 4% in the first half of January, levels not seen since 2021, bringing the central bank closer to its primary inflation target. Second, a one-month pause in trade tensions between Mexico and the United States has provided the peso with some relief, avoiding additional pressures that would complicate a more extensive monetary easing. I believe this is the right time for Banxico to further support growth with a more significant normalization of rates. It is important to emphasize that the rate cut contrasts with the stance of the Federal Reserve (Fed), which maintains a restrictive tone after noting in January a strong labor market and persistent inflationary pressures. This divergence, however, could eventually put pressure on the peso against the dollar. Nonetheless, Banxico seems confident that the maneuvering room gained from the recent stability of the MXN compensates for the risks. While Banxico acts, consumer confidence in Mexico fell to 46.7 points in January, its lowest level since October 2023. The deterioration in future economic outlooks (50.3 vs. 51.2 in December) and the decreased willingness to purchase durable goods (29.9 points) reveal growing pessimism. Although the perception of the current situation in households improved slightly (51.5), this data reinforces the urgency for policies that stimulate domestic consumption, aligning with the need to provide a less restrictive monetary policy environment that can drive greater economic dynamism. Beyond national borders, the postponed—though not non-existent—trade tensions and the potential escalation of protectionism in the U.S. add layers of complexity. A dollar strengthened by aggressive U.S. policies could unbalance the peso, limiting Banxico's room to maneuver. Banxico faces the challenge of stimulating an economy showing signs of fragility without triggering currency pressures in a volatile global scenario. The window of opportunity exists, but it is narrow: any shift by the Fed or changes in trade relations could considerably limit it. Banxico’s next move is not just about interest rates, but about navigating increasingly turbulent international waters. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
Mexican Peso Under PressureThe Mexican peso remains in a delicate position, struggling with a series of internal and external factors that exert pressure on its value. Despite a weaker U.S. dollar midweek, the local currency has faced notable downward pressures, reflecting the complex economic landscape that Mexico is navigating. Global trade uncertainty continues to be a key factor. While the extension of 25% tariffs on Mexican products by the United States provides some relief, the latent threat of new protectionist measures remains. This trade tension environment limits the peso’s recovery margin, given the nervousness among investors and businesses. On top of this global scenario, internal challenges also impact the peso’s behavior. Recent economic data paints a mixed picture, with both strengths and weaknesses that raise doubts about the resilience of the Mexican economy. Gross fixed investment, a key indicator of economic health, showed a year-over-year contraction of 0.3% in November, according to INEGI data. Although this decline is moderate compared to previous months, it reflects a persistent weakness in the construction sector, one of the traditional economic drivers. However, spending on machinery and equipment continues to show solid growth, suggesting that investment in other sectors remains dynamic. In contrast, private consumption, another fundamental component of domestic demand, has grown by 0.7% annually. However, a deeper analysis reveals an increase in the consumption of imported goods, which could generate pressure on the trade balance and further impact the peso, especially amid U.S. trade uncertainty and at-risk exports to its northern neighbor. Market attention is now focused on the decision by the Bank of Mexico (Banxico) in its upcoming monetary policy meeting. A rate cut is expected, but its magnitude will be key in determining the peso’s impact. An aggressive 50-basis-point cut could exert additional pressure on the Mexican currency. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
Mexican Peso Holds Strong Amid Adverse DataThe Mexican peso is managing to hold strong in a key trading session, showing relative stability amid growing economic uncertainty. However, recent Gross Domestic Product (GDP) data from Mexico paints a slowing growth picture, raising serious concerns about the currency’s medium- and long-term outlook. While the peso has managed to remain relatively stable against the U.S. dollar, even showing gains, this resilience could be an illusion. The 0.6% GDP contraction in the fourth quarter of 2024, combined with an annual growth rate of just 0.6%, reveals a weakening of the Mexican economy, especially in the primary and industrial sectors. The peso’s stability is mainly a reflection of the weakness of the U.S. dollar across the board during the session. The GDP contraction in the last quarter and the slowing annual growth are undoubtedly warning signs that cannot be ignored. External factors also play a crucial role in the peso’s performance. U.S. economic data, from Mexico’s largest trading partner, could put pressure on the currency. U.S. GDP growth in 2024 stood at 2.3%, a pace of expansion that has slowed in the last quarter, somewhat weakening the narrative of U.S. economic exceptionalism that dominated the first half of January. Naturally, a slower economic expansion in the U.S. could have additional indirect implications for the Mexican economy. Additionally, we cannot rule out the impact of a more aggressive monetary easing policy next week from Banco de México, which could adopt a more “dovish” stance in response to economic slowdown. Another risk factor for the peso is the potential imposition of tariffs by the U.S. on Mexican products. The implementation of these tariffs could have a significant negative impact on the Mexican economy and trigger a greater depreciation of the peso. The threat of tariffs is an uncertainty factor that weighs on the peso. While we hope it does not materialize, we cannot underestimate its potential impact on the Mexican economy and market confidence. In this context, the Mexican peso is at a crossroads. While the short-term stability of the MXN is a sign of resilience, both internal and external risks could test the currency’s strength in the coming weeks and months. The evolution of the U.S. economy, Banco de México’s monetary policy, and the threat of tariffs will be key factors to monitor closely. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.
by Pepperstone
1
USD/MXN: Is the Uptrend Breaking?Chart Analysis: USD/MXN has broken below a key ascending trendline (blue), suggesting potential weakening in the bullish momentum observed since mid-2024. 1️⃣ Key Support Breakdown: The pair closed below the ascending trendline at 20.25, signaling potential bearish pressure. The next key support lies near 20.00, a psychological level and a significant horizontal zone. 2️⃣ Moving Averages: 50-day SMA (blue): At 20.38, acting as dynamic resistance following the breakdown. 200-day SMA (red): Positioned lower at 19.05, confirming a longer-term bullish structure remains intact despite recent weakness. 3️⃣ Momentum Indicators: RSI: At 43.19, showing bearish momentum but not yet oversold. MACD: Hovering near the zero line with a slight bearish crossover, indicating waning upward momentum. What to Watch: A sustained move below 20.00 could confirm a deeper bearish correction toward the 200-day SMA. A recovery back above the trendline and 20.38 could invalidate the bearish breakout and signal a continuation of the bullish trend. USD/MXN's near-term direction hinges on its ability to either hold above 20.00 or reclaim the broken trendline for renewed bullish momentum. -MW
by FOREX.com