The Mexican Peso has recently depreciated by 1.51% against the US Dollar as the Dollar Index hits a four-month high, prompted by expectations concerning Trump’s policies. Investor concerns regarding a possible second Trump presidency and protectionist measures support the USD’s rise, causing the USD/MXN pair to trade at 20.46.
Although risk appetite remains strong with Wall Street showing solid gains, rumors of Robert Lighthizer leading US trade policy have sparked fears among investors. Consequently, the Dollar Index has risen to 105.51. Mexico’s Consumer Confidence has improved in October, while Industrial Production figures were mixed ahead of Banxico’s monetary policy decision.
According to projections, Banxico is likely to cut interest rates by 25 basis points, with core inflation approaching the 3% target. Additionally, Mexican President Claudia Sheinbaum has announced plans to keep prices of basic groceries affordable for consumers by renewing an agreement with food producers and retailers.
Mexico’s economic docket this week will feature the Banxico policy decision, while Fed speakers, inflation data, and Retail Sales will dictate the future path of the US Dollar. Amid this, the USD/MXN uptrend remains intact, with resistance levels ahead, while support levels will determine the extent of any potential downward movement. Banxico meets eight times a year and is influenced by the decisions of the US Federal Reserve, with interest rates playing a significant role in guiding monetary policy and affecting the value of the Mexican Peso.
