The Mexican Peso (MXN) is experiencing a decline against its major counterparts due to changing interest rate expectations and recent data releases. Against the US Dollar (USD), the Peso has weakened after the release of higher-than-expected Building Permits data in the US. This positive data signals an optimistic economic outlook for the US, supporting the Greenback. The Mexican Peso is also losing ground against the Pound Sterling (GBP) and the Euro (EUR) as elevated inflation levels in Europe may delay potential rate cuts by the Bank of England (BoE) and the European Central Bank (ECB).
The Mexican Peso initially rose against the US Dollar following comments from a Fed Board of Governors member suggesting a potential rate cut later in the year. However, these gains were erased after the release of US Building Permits data. The Bank of England and European Central Bank may hold off on rate cuts due to persistent inflation levels in the UK and the Eurozone. This has resulted in the Mexican Peso trading mixed against its counterparts.
Inflation data from the UK and Eurozone has influenced the performance of the Mexican Peso, leading to a decline against the Euro and the Pound. The UK Consumer Price Index showed inflation remained high in June, while Eurozone inflation also remained unchanged. These factors suggest that the Bank of England and the European Central Bank may delay making further rate cuts, impacting the performance of the Mexican Peso against the Euro and the Pound.
In terms of technical analysis, USD/MXN has found support at the 50-day Simple Moving Average indicating a potential reversal higher. However, the trend remains bearish, with a break below the 50-day SMA confirming the downtrend bias. The next key macroeconomic release for the Mexican Peso is scheduled for July 22nd, when growth figures for May will be revealed by the National Statistics Agency (INEGI).
In conclusion, the Mexican Peso is currently trading lower against its major counterparts due to changing interest rate expectations and recent data releases. The impact of the UK and Eurozone inflation data, coupled with potential rate cut delays by the Bank of England and the European Central Bank, have influenced the performance of the Peso. Technical analysis suggests a potential reversal higher for USD/MXN, but the overall trend remains bearish. Investors will be closely monitoring upcoming macroeconomic releases for further insights into the performance of the Mexican Peso.
