USD/MXN plummets to 19.27 as Mexican Peso cheers deal to avoid US tariffs
|- Traders react to the US termination of tariffs on Mexican goods.
- Increased expectations of a Fed rate cut also play its role.
- Less data on hand to watch for fresh impulse.
With the 11th hour success in avoiding the US tariffs, Mexican Peso (MXN) became buyers’ best bet at the start of the week, which in turn dragged the USD/MXN pair to the month’s fresh low of 19.27 during initial Asian session on Monday.
Having remained high since the US President Donald Trump announced 5% tariffs on the Mexican goods (that can go up to 25%) in retaliation to illegal immigration, the quote dropped heavily after the US agreed to put an “indefinite” halt to its tariffs announced previously.
Out of little news shared with the media on the deal, it can be said that Mexico agreed to deploy the National Guard nationwide with a higher emphasis to tame illegal migration from its southern border while also keeping asylum seekers in Mexico.
Given the global markets’ close, after the news broke on late-Friday, investors are now taking advantage of the reports to benefit while trading.
Also supporting the momentum could be Friday’s disappointing employment data from the US that strengthened calls for the Fed rate cut.
Looking forward, April month JOLTS job openings from the US becomes the only data on the economic calendar to follow while political news can keep entertaining momentum traders. Having witnessed sluggish US job numbers off-late, today’s catalyst is expected to soften to 7.240 million from 7.488 million prior.
Technical Analysis
A 21-day simple moving average (SMA) at 19.2660 seems immediate support, a break of which can increase selling pressure towards 100-day SMA level of 19.1431 while 19.3641 comprising 200-day SMA and last week’s low near 19.4667 can act as nearby resistances for prices.
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