- During the trading session on Monday, it has been somewhat quiet in the dollar against the Mexican peso, but that's not a huge surprise considering that it was President's Day in America.
- This obviously has a major influence on volume and the fact that the market also has a lot to think about externally probably comes into play here as well.
- Since November, we have seen a lot of consolidation in this pair between 20 pesos and 21 pesos.
We are currently wrestling around with the 50 day EMA and we are starting to tilt a little bit to the downside, but I would hardly call this some type of major sell-off. After all, the Mexican Central Bank has recently started cutting pretty aggressively, and of course the Mexican economy is struggling. Add to that the idea that the Americans could very well still slap tariffs on the Mexicans, and you could have a major problem for Mexico.
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Most of the Tariffs May Be Avoided
That being said though, I do believe that the Mexicans may be able to avoid some of the tariffs, or maybe even most of them, because the border crossings in the southern part of the United States have all but disappeared. This is the biggest thing that Trump wants, and he will use tariffs if he has to. In general, I think we are somewhat stuck in consolidation, but if we managed to break down below the 19.50 level, it could be the beginning of the end of the uptrend of the US dollar against the Mexican peso. On the other hand, though, if something goes wrong and we start rallying again, breaking above the 21 Mexican peso does open up the possibility of a move to much higher levels, perhaps as high as 25 pesos. Right now, I think we're in a cautious wait and see mode.
USD/MXN Live Chart
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