The Mexican Peso is set for a busy week ahead, with major economic data releases and the Bank of Mexico’s policy meeting on the agenda. This could have a significant impact on the performance of the Peso in the forex market. Retail sales data for July will be released on Monday, followed by inflation data on Tuesday. The outcomes of these releases could influence the decision of Banxico on Thursday regarding a potential adjustment to the key interest rate. Economists are expecting a 0.25% cut in the interest rate, which could have implications for the Peso in terms of foreign capital inflows.
The Banxico meeting on Thursday will be a key event to watch as the central bank decides on the interest rate. The decision made by Banxico could have a significant impact on the performance of the Mexican Peso in the forex market. Lower interest rates are generally seen as negative for a currency, as it reduces foreign capital inflows. Banxico’s decision to cut interest rates by 0.25% at the August meeting was a close call, with only three members voting in favor. The decision was influenced by factors such as the slowdown in economic activity and the complex inflationary environment.
Friday will see the release of Balance of Trade data, which will provide further insights into the economic health of Mexico. Consistent surpluses in the Balance of Trade are generally positive for a currency, while deficits can have a negative impact. The outcome of this data release could also influence the performance of the Peso in the forex market. Overall, the week ahead is expected to be eventful for the Mexican Peso, with key economic data releases and the Banxico policy meeting set to drive volatility in the currency.
In terms of technical analysis, the USD/MXN pair is currently on an upward trend, finding support at the base of a long-term rising channel. The pair has been rising for the past four days, indicating a short-term uptrend. A key level to watch is 19.53, which if broken, could further confirm the bullish trend for USD/MXN. The pair is currently in a medium and long-term uptrend, with the recent support levels suggesting that the pair may continue its upward trajectory in the short term. Traders and investors will need to closely monitor these technical levels and trends to make informed decisions in the forex market regarding the Mexican Peso.
