Mexican Peso recovers after turnaround in risk appetite

The Mexican Peso reverses earlier loses after risk appetite improves.
The Peso fell against the US Dollar after strong US economic data strengthened the buck on Thursday.
USD/MXN could be in a new short-term uptrend after breaking above a trendline.

Joaquin Monfort FXStreet

The Mexican Peso (MXN) recovers after a weak start on Friday following a turnaround in risk sentiment that supports the Peso, a so-called "risk-on" currency.

MXN recently weakened against the US Dollar, threatening to reverse the Peso’s short-term trend, after a slew of positive economic data from the US further delayed the time the Federal Reserve (Fed) is expected to lower interest rates, supporting the Greenback.

The Mexican trade balance showed a wider-than-expected 3.746 billion deficit in April according to data from INEGI released on Friday. This was lower than the previous month's surplus of 2.098B and the 0.8B deficit forecast by economists.

Mexican Peso: Bank of Mexico releases meeting Minutes

Mexican data released on Thursday mostly came out in line with estimates, but the Q1 Gross Domestic Product (GDP) showed a surprise upward revision to 0.3% on a quarter-on-quarter basis compared to the 0.2% previous estimate. This temporarily boosted the Mexican Peso in its pairs.

The release of the Bank of Mexico (Banxico) May meeting Minutes showed most policymakers continued to see upside risks to inflation despite data showing core inflation continuing to decline. Persistent inflation in the Services sector was seen as a key stumbling block to inflation falling to Banxico’s 3.0% target.

The Minutes showed the decision to keep interest rates at 11.00% was unanimous.

In its concluding statements, Banxico’s Governing Board said: “challenges and risks prevail, which requires monetary policy to continue being managed prudently.”

Adding, “With this decision, the monetary policy stance remains restrictive and will continue being conducive to the convergence of inflation to the 3% target in the forecast horizon.”

Technical Analysis: USD/MXN breaks above trendline and continues rising

USD/MXN – or the number of Pesos that can be bought with one US Dollar – rises after breaking above the trendline for the April-May decline. This could possible indicate the pair is now in a short-term uptrend, favoring long positions over shorts.

USD/MXN 4-hour Chart

A break above Thursday’s high at 16.76 would confirm a continuation of the young uptrend to a possible target at the previous range lows around 16.85.

Given the medium and long-term trends are bearish, however, there remains a high risk of the short-term trend reversing and the pair continuing lower.

A decisive break below the grey trendline for the up move at roughly 16.68 would bring the short-term uptrend into doubt and possibly signal the resumption of more downside.

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product released by INEGI is a measure of the total value of all goods and services produced by Mexico. The GDP is considered as a broad measure of economic activity and health. Generally speaking, a high reading is seen as positive (or bullish) for the Peso, while a negative trend is seen as negative (or bearish).

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD eyes 1.1800 barrier near two-month highs

EUR/USD extends its gains for the second consecutive day on Tuesday and approaches 1.1800. On the daily chart, technical analysis indicates a persistent bullish bias, as the pair moves upward within the ascending channel pattern. Additionally, the 14-day Relative Strength Index at 68.89 reaffirms the bullish bias.

GBP/USD climbs to 1.3500 area, renews ten-week high

GBP/USD extends its weekly rally and trades at its highest level since early October near 1.3500. The US Dollar remains under persistent bearish pressure heading into the holidays, while Pound traders largely brush off the latest interest rate cut from the Bank of England.

Gold approaches $4,500 as record-setting rally continues

Gold builds on Monday's impressive gains and advances toward $4,500, setting fresh record-highs along the way. Heightened geopolitical tensions, combined with the broad-based US Dollar (USD) weakness ahead of the Q3 GDP data, help XAU/USD preserve its bullish momentum.

Uniswap holds above $6 as traders eye UNIfication vote outcome

Uniswap price holds above $6 at the time of writing on Tuesday after closing above a key resistance zone in the previous week. Traders are focusing on the highly anticipated UNIfication proposal, which is set to conclude on Thursday, and could become a key near-term catalyst. On the technical side, momentum indicators are flashing bullish signals, hinting at an upside rally.

Ten questions that matter going into 2026

2026 may be less about a neat “base case” and more about a regime shift—the market can reprice what matters most (growth, inflation, fiscal, geopolitics, concentration). The biggest trap is false comfort: the same trades can look defensive… right up until they become crowded.

XRP steadies above $1.90 support as fund inflows and retail demand rise

Ripple (XRP) is stable above support at $1.90 at the time of writing on Monday, after several attempts to break above the $2.00 hurdle failed to materialize last week. Meanwhile, institutional interest in the cross-border remittance token has remained steady.