USD/MXN Climbs 0.62%, Hits 16.65 Amid US Strength

USD/MXN Climbs 0.62%, Hits 16.65 Amid US Strength

Key Points:

  • USD/MXN increased by 0.62%, trading at 16.65 due to strong US indicators.
  • Mexico’s manufacturing PMI slightly decreased to 52.2 in March.
  • US economic resurgence, highlighted by ISM Manufacturing Activity expansion.
  • Technical analysis suggests potential resistance at moving averages if USD/MXN exceeds 16.62.

The week began with the Mexican Peso facing a less favourable position against the USD, marking a decrease of 0.57%. The currency pair USD/MXN movement was influenced by robust economic indicators, primarily from the United States. Additionally, there was a minor easing in manufacturing activity within Mexico. Subsequently, the Peso underwent a significant depreciation in response to these developments, underscoring the currency markets’ sensitivity and reactions to national economic performances.

As of the latest figures, the USD/MXN pair is trading at 16.65, marking an increase of 0.62%. This recent appreciation of the US Dollar against the Mexican Peso indicates the ongoing adjustments in the currency markets, responding to the interplay of economic indicators and market sentiment. The adjustment reflects the broader economic narratives unfolding in both countries, influencing investor confidence and currency valuation.

Mexico’s Manufacturing PMI Dips to 52.2 in March

Mexico’s economic landscape has seen marginal changes, particularly in manufacturing. According to S&P Global, the March Manufacturing Purchasing Managers’ Index (PMI) stood at 52.2, slightly down from February’s 52.3. Pollyanna de Lima, Economic Associate Director at S&P Global, highlighted that Mexico’s manufacturing sector continued to expand, driven by a solid increase in domestic orders. This scenario has positively impacted factory production, buying levels, and employment within the country.

Conversely, the United States has shown robust economic signals. The ISM Manufacturing Activity expanded for the first time since September 2022, and the Prices Paid Index surged to levels last witnessed in August 2022. Furthermore, the US Dollar Index has strengthened, standing above 105.00, with a 0.49% increment. These indicators underscore a resurgence in the US economic activity, contributing to the dollar’s appreciation for the USD/MXN pair.

USD/MXN Targets SMA Resistance, Trades Above 16.62

A closer look at the USD/MXN currency pair through chart analysis reveals a new four-day high at 16.67. This recent high, alongside the examination of key levels such as last year’s low at 16.62 and moving averages (50-day SMA at 16.95, 100-day SMA at 17.05, and 200-day SMA at 17.19), provides a framework for potential future movements. The currency pair could see an upside if it closes daily above 16.62, targeting the moving averages as potential resistance levels. On the flip side, remaining below 16.62 could see the pair target the year-to-date low of 16.51 and October 2015 low of 16.32, marking potential downside objectives.