The Mexican currency is expected to retreat in 2024 as the USD rebound
Highlights: The Mexican Peso (MXN) has retreated from a 17-week high against the US Dollar (USD) as markets begin the new trading year focusing on US labor and output data. Economic data from Mexico is not on the calendar for this week, and the USD is expected to be the primary driver to usher in […]
Highlights:
- The Mexican Peso has fallen as broader markets concentrate on US data.
- The performance of US labour and output figures are expected to have a significant impact on the markets, particularly in the lead up to NFP Friday.
The Mexican Peso (MXN) has retreated from a 17-week high against the US Dollar (USD) as markets begin the new trading year focusing on US labor and output data.
Economic data from Mexico is not on the calendar for this week, and the USD is expected to be the primary driver to usher in 2024. The Greenback is rebounding in early trading as money markets ease back on bets of Federal Reserve (Fed) rate cuts, with the US Dollar reclaiming around a full percent against the Peso.
The Mexican peso is regarded as the most traded currency in Latin America. Its value is mainly determined by various factors, such as the country’s economic performance and the level of foreign investment. Remittances sent by Mexicans living in the US also affect its value.
Political factors can also affect the value of the Mexican currency. For instance, the nearshoring process, which involves relocating manufacturing facilities and supply chains to other countries, is seen as a positive factor for the country’s economy as it is a manufacturing center in the Americas.
The Mexican Peso depreciated as investors turned to the Greenback positions. The USD/MEXN has recovered from its recent multi-month low and is now trading above the 200-hour SMA. The US Dollar is still expected to gain as long as the bullish momentum continues. The long-term trend in the exchange rate remains up, with the next resistance level at 17.50 being the 50-day SMA and the 200-day SMA.
The Mexican currency is expected to fall further to its lowest levels since 2016 if the USD/MXN breaks below its 2023 lows.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 1.01% | 0.88% | 0.61% | 0.80% | 0.66% | 1.08% | 1.09% | |
| EUR | -0.86% | 0.04% | -0.27% | -0.06% | -0.34% | 0.22% | 0.18% | |
| GBP | -0.90% | -0.04% | -0.28% | -0.10% | -0.14% | 0.18% | 0.14% | |
| CAD | -0.61% | 0.23% | 0.46% | 0.17% | 0.04% | 0.46% | 0.44% | |
| AUD | -0.81% | 0.05% | 0.09% | -0.21% | -0.33% | 0.28% | 0.25% | |
| JPY | -0.65% | 0.36% | 0.29% | 0.15% | 0.33% | 0.59% | 0.36% | |
| NZD | -1.09% | -0.23% | -0.19% | -0.48% | -0.28% | -0.61% | -0.05% | |
| CHF | -1.04% | -0.18% | -0.14% | -0.43% | -0.22% | -0.40% | 0.07% |
