- The Mexican Peso is holding on the high side on Friday.
- An uptick in US consumer sentiment has bolstered market risk appetite.
- Hopes for a September Fed rate cut remain high.
The Mexican Peso (MXN) eased slightly higher against the Greenback on Friday, but bullish momentum behind the MXN is draining quickly after putting in three straight days of gains. US consumer sentiment figures from the University of Michigan bolstered risk appetite during the US session, prompting broad weakness in the US Dollar as investors scooped up riskier assets.
Mexico has limited representation on the economic calendar next week, and investors will watch for the kick-off of the Jackson Hole Economic Symposium later next week.
Daily digest market movers: Mexican Peso looks for gains but momentum remains thin
- The University of Michigan’s Consumer Sentiment Index rose to 67.8 in August, up from the previous 66.4.
- Market sentiment lurched higher after the sentiment index handily beat the forecast of 66.9.
- Consumer 5-year Inflation Expectations and held steady at 3.0% in August, unchanged from the previous month.
- The Jackson Hole Symposium begins next Thursday, plenty of central bank policymaker appearances are expected.
Mexican Peso price forecast: Peso bulls at risk of running out of gas
The Mexican Peso (MXN) has recovered significant ground against the US Dollar, climbing over 7.3% peak-to-trough from a nearly two-year low. Still, significant ground needs to be covered before Peso buyers can consider the MXN on balance, with the Peso still down over 14% from its peak 2024 bids against the Greenback.
USD/MXN has closed in the red for all but one of the last seven consecutive trading days as the Greenback gives back ground to the Peso, but the pair continues to trade north of the 50-day Exponential Moving Average (EMA) at 18.34, and a firm pattern of higher lows is keeping Greenback shorts at bay.
USD/MXN daily chart
Economic Indicator
Michigan Consumer Sentiment Index
The Michigan Consumer Sentiment Index, released on a monthly basis by the University of Michigan, is a survey gauging sentiment among consumers in the United States. The questions cover three broad areas: personal finances, business conditions and buying conditions. The data shows a picture of whether or not consumers are willing to spend money, a key factor as consumer spending is a major driver of the US economy. The University of Michigan survey has proven to be an accurate indicator of the future course of the US economy. The survey publishes a preliminary, mid-month reading and a final print at the end of the month. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
Read more.Last release: Fri Aug 16, 2024 14:00 (Prel)
Frequency: Monthly
Actual: 67.8
Consensus: 66.9
Previous: 66.4
Source: University of Michigan
Consumer exuberance can translate into greater spending and faster economic growth, implying a stronger labor market and a potential pick-up in inflation, helping turn the Fed hawkish. This survey’s popularity among analysts (mentioned more frequently than CB Consumer Confidence) is justified because the data here includes interviews conducted up to a day or two before the official release, making it a timely measure of consumer mood, but foremost because it gauges consumer attitudes on financial and income situations. Actual figures beating consensus tend to be USD bullish.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: No respite to the selling pressure
AUD/USD remained well on the defensive, trading in a volatile fashion that saw spot surpass the 0.6100 hurdle just to fade that uptick afterwards and revisit the 0.5980 towards the end of the NA session.
EUR/USD: Tariffs keep the sentiment subdued
EUR/USD added to Friday’s pullback and revisited the sub-1.0900 area, or two-day lows on the back of further gains in the US Dollar and the widespread demand for the safe-haven universe.
Gold recedes to four-week lows near $2,950
The persistent selling pressure is now dragging Gold prices to the area of fresh multi-week troughs near the $2,950 mark per troy ounce, always amid the continuation of the recovery in the US Dollar, highr US yields across the curve and unabated tariff tensions.
Binance founder CZ becomes strategic advisor to Pakistan's Crypto Council
The Pakistan Crypto Council appointed Binance founder and former CEO Changpeng Zhao (CZ) as a strategic advisor on Monday to provide guidance on crypto infrastructure, education and adoption for the Pakistani government and private companies.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.