- Mexican Peso pressured despite Bessent’s trade optimism as markets react to US tariff escalation against China.
- Citi survey shows Banxico expected to cut rates by 50 bps in May; growth forecasts revised lower.
- Traders await Mexico CPI and US inflation data with Fed minutes likely to shape rate expectations.
The Mexican Peso prolonged its losses for the third straight day against the Greenback as market sentiment improved, spurred by revelations of US Treasury Secretary Scott Bessent that deals could be made with major trading partners. At the time of writing, the USD/MXN trades at 20.83, up 0.75%.
As of this writing, the global equity sell-off has paused, yet bulls are not out of the woods, even though Bessent's words provide hope. Nevertheless, news broke that the White House confirmed that 104% tariffs on China went into effect at 12:00pm EST
The Peso weakened slightly on the headlines amid a scarce economic docket. USD/MXN traders are awaiting the release of the Consumer Price Index (CPI) for March, which is expected to rise slightly.
Citi Mexico Expectations Survey hints that most economists project further easing by Banco de Mexico (Banxico), which is expected to cut rates 50 basis points (bps) in May. The USD/MXN exchange rate would likely remain below 21.00, and the economy is expected to grow less than expected in the previous survey.
Across the border, Chicago Fed Governor Austan Goolsbee crossed the wires, saying that tariff rates are much more than what the Fed had been modelling. On the data front, the schedule is absent, yet investors are eyeing the release of the Fed’s latest minutes, alongside US CPI and PPI data.
Daily digest market movers: Mexican Peso drops as economists project a deeper economic slowdown
- Citi Mexico Expectations Survey revealed that Banxico will likely cut rates to 8% toward the end of 2025. For the next year, rates are expected to fall to 7%.
- The poll showed that the USD/MXN is projected to end at 20.90, while inflation in 2025 will be 3.80% for the full year and increase from 3.66% to 3.7% by the year’s end.
- Mexico’s Gross Domestic Product (GDP) is expected to grow by 0.3% in 2025, less than the previous survey of 0.6%.
- Banxico’s Governor, Victoria Rodríguez Ceja, stated that the central bank will remain attentive to US trade policies and their impact on the country, with a primary focus on inflation.
USD/MXN technical outlook: Mexican Peso treads water as USD/MXN surges past 20.70
The uptrend remains in place as the USD/MXN cleared the confluence of the 50-day and 100-day Simple Moving Averages (SMAs) near 20.34/36, keeping the rally alive. On further strength, buyers could challenge the March 4 peak at 20.99, followed by the year-to-date (YTD) high of 21.28.
Conversely, if USD/MXN falls below 20.34, the first support will be the psychological 20.00 figure. A breach of the latter will expose the 200-day SMA at 19.80.
Economic Indicator
12-Month Inflation
The 12-month inflation index released by the Bank of Mexico is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of Mexican Peso is dragged down by inflation. The inflation index is a key indicator since it is used by the central bank to set interest rates. Generally speaking, a high reading is seen as positive (or bullish) for the Mexican Peso, while a low reading is seen as negative (or Bearish).
Read more.Next release: Wed Apr 09, 2025 12:00
Frequency: Monthly
Consensus: 3.8%
Previous: 3.77%
Source: National Institute of Statistics and Geography of Mexico
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.1400 after US PMI data
EUR/USD comes under renewed bearish pressure in the American session and trades below 1.1400. Upbeat PMI data from the US and a Wall Street Journal report claiming that the White House is considering slashing tariffs on Chinese imports support the USD and weigh on the pair.
GBP/USD retreats below 1.3300 as USD rebounds
GBP/USD stays under bearish pressure and trades below 1.3300 on Wednesday. The US Dollar benefits from the upbeat PMI data and easing fears over a further escalation in the US-China trade conflict, causing the pair to push lower.
Gold slumps below $3,300 on signs of de-escalation of US-China trade conflict
Gold extends its decline and trades below $3,300 in the second half of the day on Wednesday. The Wall Street Journal reported that the Trump administration was considering to lower tariffs on Chinese goods, reviving optimism about a de-escalation in the trade war and causing Gold to lose interest as a safe-haven.
Bitcoin bullish momentum builds as premium exceeds 9% for first time in three months
Bitcoin price is extending its gains, trading above $94,000 at the time of writing on Wednesday, following a two-day rally of 9.75% so far this week. BTC rally gathers momentum as trade war fears ease, following US President Donald Trump’s downplaying of tensions with China.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.