Mexican Peso Weakens Amid Domestic Concerns and Rising US Dollar
The Mexican Peso (MXN) has depreciated against its major counterparts, driven by domestic headwinds and a stronger US Dollar (USD). The Mexican government's recent judicial reforms and economic concerns have weighed on investor confidence.
Interest Rate Expectations
The Bank of Mexico (Banxico) is expected to cut interest rates by 25 basis points (bps) at its upcoming meeting. However, the US Federal Reserve (Fed) is also expected to cut rates, which could narrow the interest rate differential and put downward pressure on the peso.
Economic Outlook
The Mexican economy faces challenges, including public debt, a potential recession, and concerns about the judicial reforms. These factors have contributed to the weaker peso.
Technical Analysis
The USD/MXN pair has found support at the base of a long-term rising channel. A break below this level could signal a continuation of the downtrend. However, there is also a possibility of a recovery, with a potential target at 19.53.