Mexican Peso holds firm as Banxico minutes supports the Peso

The Mexican Peso holds firm versus the Greenback as Banxico adopted a cautious stance regarding monetary policy, while jobs data in the US revealed that the labour market is stable. The USD/MXN pair exchanges hands at 16.95, virtually unchanged.

USD/MXN steadies as cautious Banxico signals offset solid US jobs data

Market sentiment shifted positively, despite the lack of progress in the Middle East conflict. Data from Mexico revealed that the economy would have grown a modest 0.1% in July, according to the national statistics agency, INEGI.

INEGI revealed that the Timely Indicator of Economic Activity – known in Spanish as Indicador Oportuno de la Actividad Económica (IOAE) – indicated that the economy would slow in Q3, given that the growth estimate for June is 0.2% MoM.

Annually, the Mexican economy grew 2.7% YoY in July, up from June’s 2% growth, boosted by the hosting of the World Cup.

On Friday, the Mexican economic docket will feature the release of Retail Sales, which are expected to rise from -0.6% in May to 0.1% MoM in June, while in the twelve months to June, they are projected to almost double from 1.6% to 3.1%.

Regarding the USMCA trade agreement, the Canadian Prime Minister Mark Carney and Mexico’s President Clauda Sheinbaum spoke today. They discussed the importance of renewing USMCA as soon as possible.

In the US, US Treasury yields trimmed some of Wednesday’s losses following the US Treasury Department's bond buyback, with the 30-year yield up nearly 6 basis points to 5.348%.

On the data front, jobless claims for the week ending August 15 came in better than expected at 206K, below forecasts for a 210K jump and the previous print of 212K.

Fed officials had crossed the wires, with St. Louis Fed President Alberto Musalem remaining hawkish, recommending a rate hike at the July meeting. For the September meeting, he is not pre-committed to a stance, but, given recent speeches, he remains in the hawkish camp.

San Francisco Fed's Mary Daly said rising long-term bond yields are a global issue, limiting their signal usefulness for the Fed. She doesn’t see Fed credibility at risk, noting the short end reacts to data.

USD/MXN Price Forecast: Technical outlook

In the daily chart, USD/MXN trades at 16.9568, keeping a bearish near-term tone as spot holds clearly below the cluster of the 50-, 100- and 200-day simple moving averages (SMA), grouped around 17.3454. The Moving Average Triple resistance overhead suggests the broader trend remains under pressure, while the Relative Strength Index (RSI) at 28.98 slips into oversold territory, hinting that the latest slide may be stretched even as sellers retain control beneath the dominant descending trend lines.

On the topside, initial resistance is seen at the Triple SMA cluster near 17.3454, with further barriers aligned along the shorter-term downtrend resistance line drawn from 18.1651 through the 17.3871 break area, and higher up at the longer-term descending trend line anchored at 21.0808. On the downside, momentum support is reflected by the oversold RSI reading around 28.98, which could slow the pace of losses but would need a sustained recovery above the moving averages and nearby trend-line caps to signal a more durable bullish reversal.