The Mexican Peso has faced downward pressure, primarily driven by concerns over the proposed judicial reforms and their potential impact on investor sentiment. While positive news regarding international trade and comments from Bank of Mexico officials have provided some support, the overall outlook for the Peso remains cautious.
USD/MXN Key Factors Affecting the Peso
- Political Risk: The proposed judicial reforms have raised concerns about the independence of the judiciary and could deter foreign investment.
- Carry Trade Flows: The unwinding of carry trade positions in the Mexican Peso due to lower interest rate differentials could be contributing to the currency’s weakness.
- Economic Data: While the recent release of inflation and retail sales data has been somewhat positive, the overall economic outlook remains uncertain.
USD/MXN Technical Outlook
The USD/MXN pair is trading within a rising channel, suggesting a potential for further upside. However, the pair has recently consolidated near the 19.52 level, indicating a potential for a short-term pullback. A break above 19.53 could signal a continuation of the uptrend towards the channel highs.
