- Mexican peso recovers after Trump mentions there is a good chance of a deal.
- US Dollar holds in negative territory across the board on rate cut expectations.
The USD/MXN pair dropped further during the US session but continued to trade in the weekly range between 19.50 and 19.80. Recently printed a fresh daily low at 19.54 and as of writing was trading at 19.58, around the same level it closed last week.
Earlier today rose to 19.80 but then turned lower amid a decline of the US Dollar across the board, weakened by rising expectations of a potential rate cut from the Federal Reserve and also amid positive developments regarding US-Mexico negotiations.
Mexican officials are at a meeting looking to reach a deal in order to avoid the implementation of a 5% tariff to all Mexican imports going into the US. Some optimism surged after US President Trump tweeted: “If we are able to make the deal with Mexico, & there is a good chance that we will, they will begin purchasing Farm & Agricultural products at very high levels, starting immediately. If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!“
Regarding data, while in the US, the NFP disappoint in Mexico inflation data came in below expectations but remained above the central bank’s target. The CPI rose 4.28% (annual) and the core 3.77% after a 0.16% gain in May. Next week in the US, inflation data is due and could have some influence on the US Dollar amid the recent change in monetary policy expectations.
USD/MXN 4 Hour chart
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