Mexican Peso dips on Middle East tensions, eyes on FOMC minutes

The Mexican Peso loses some ground on Tuesday, depreciating by about 0.16% against the US Dollar as investors await the release of the Federal Reserve’s last meeting minutes, with a resolution of the US-Iran conflict remaining unlikely. The USD/MXN trades at 17.06, after bouncing off daily lows of 17.02.

USD/MXN climbs as traders eye Fed minutes, Banxico minutes and USMCA risks.

The US-Iran conflict is grabbing the headlines. Recently, CNN, citing a US official, said that Trump told top administration envoys to halt their conversations with Iran. In addition, Trump said that the US Navy blockade remains in full force and effect, while US data was mixed, with US Housing Starts coming in below estimates due to higher mortgage rates and elevated prices.

July Housing Starts in the US declined 12.4% month-over-month, from 1.415 million in June to 1.239 million. Industrial Production for the same period ticked a tenth below estimates and the previous month's reading, though the data was largely ignored amid rising tensions in the Middle East.

The Greenback has risen during the day, up sone 0.07% according to the US Dollar Index (DXY). The DXY, which tracks the buck’s performance against a basket of six currencies, is at 99.65, near familiar levels.

In Mexico, the economic docket remains absent, with traders eyeing the release of the Bank of Mexico (Banxico) meeting minutes on Thursday, followed by Retail Sales on Friday, August 21.

Monex Director of Economic Analysis Janeth Quiroz said that, alongside geopolitics, “the Peso is affected by uncertainty about the revision of the USMCA trade agreement.”

USD/MXN Price Forecast: Technical outlook

In the daily chart, USD/MXN trades at 17.0610, extending its decline beneath the cluster of longer-term simple moving averages (SMA) and preserving a bearish near-term bias. The latest reading of the Moving Average Triple (50, 100, 200, simple) at 17.3607 sits well above spot, hinting that the broader trend tone remains heavy while price stays capped below this grouped average. Momentum has stabilized, with the Relative Strength Index (14) lifting to 33.19 from oversold territory, yet the indicator still leans to the downside and only suggests that selling pressure may be moderating rather than reversing.

On the topside, initial resistance is located at the grouped longer-term SMA cluster near 17.36, which is reinforced by the descending trend-line originating from 18.1651 and, higher up, by the broader downtrend line drawn from 21.0808. As long as USD/MXN holds below these structural barriers, downside risk dominates, and any corrective bounce is likely to struggle before a sustained recovery can develop.