Mexican Peso Gains on Improved Market Sentiment
From a technical standpoint, the peso is expected to remain supported in the short term, with the dollar likely to stay under pressure.
Quick overview
- The Mexican peso appreciated against the U.S. dollar, closing at 18.9114 pesos per dollar, a gain of 0.15%.
- Market sentiment improved due to reduced tensions in the Middle East, particularly between Israel and Iran.
- Traders are preparing for the U.S. Federal Reserve's monetary policy decision, with no rate changes expected but close attention on economic projections.
- Analysts are optimistic about the upcoming meeting between Mexican President Claudia Sheinbaum and Donald Trump, which may positively impact the Mexican economy.
The Mexican peso appreciated against the U.S. dollar in Monday’s session, supported by a reduction in concerns over tensions in the Middle East, as the market braces for key monetary policy announcements.
The exchange rate closed at 18.9114 pesos per dollar, compared to 18.9396 in the previous session, according to official data from the Bank of Mexico (Banxico). This represented a gain of 2.82 centavos, or 0.15%, for the local currency.
The dollar traded in a range between a high of 18.9757 and a low of 18.8248 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, edged down 0.01% to 98.17 points.
Tensions flared between Israel and Iran on Friday, triggered by disputes over the Islamic regime’s nuclear development program. Markets initially sought safe-haven assets in response, but sentiment improved by Monday, boosting emerging market currencies like the peso.
Market participants remain attentive to changes in geopolitical narratives, the status of nuclear negotiations with Iran, and whether Israel refrains from further military action. U.S. President Donald Trump stated that a deal should be possible.
Traders are also gearing up for the U.S. Federal Reserve’s monetary policy decision, due Wednesday. While no rate changes are expected, markets will closely watch the Fed’s economic projections for further clues.
Local Data and Market Impact
In Mexico, attention is also focused on the upcoming meeting between President Claudia Sheinbaum and Donald Trump during this week’s G7 Summit in Canada. Some analysts suggest the meeting could be seen as a positive signal.
“The fact that Claudia Sheinbaum will have a face-to-face meeting with Donald Trump raises some optimism about the Mexican economy, particularly around the potential easing or removal of tariffs,” said one analyst.
From a technical standpoint, the peso is expected to remain supported in the short term, with the dollar likely to stay under pressure. The exchange rate could fluctuate this week between a high of 19.15 and a low of 18.75 pesos per dollar.
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