Mexican Peso rises on soft US jobs data, intervention speculation
The Mexican Peso advanced, boosted by a weaker-than-expected US jobs report that weighed on the US Dollar, which was also undermined by a rumored intervention in FX markets by Japanese authorities. At the time of writing, the USD/MXN trades at 17.48, down 0.43%.
USD/MXN drops gains as soft US jobs data pressures Greenback
Early in the North American session on Thursday, the US Bureau of Labour Statistics (BLS) revealed employment figures. June Nonfarm Payrolls were weaker than expected, dipping from 129K to 57K, beneath forecasts. Worth noting that May and April figures were downward revised, trimming the number of jobs created in both months by -74K.
At the same time, the Unemployment Rate edged lower from 4.3$% to 4.22%, attributed to a slide in labour force participation.
Consequently, the Greenback extended its losses. The US Dollar Index (DXY), which tracks the performance of the American currency against six other currencies, is down 0.55% at 100.85.
In Mexico, news that US President Donald Trump doesn’t want to extend the USMCA free trade agreement prompted a reaction from Economy Minister Marcelo Ebrard. He said that the US opted not to extend the deal and that the agreement will undergo non-stop annual reviews for 10 years.
A Bloomberg article read, “The potential disruptions and the broad economic impact are stark. USMCA boosted economic activity among the three countries, which combined represent nearly a third of the world’s gross domestic product. Intraregional trade surpassed $1.6 trillion in 2024, up from $1 trillion when the agreement went into place in 2020.”
On Wednesday, the three countries could’ve signed a 16-year extension, but Washington wants changes to a deal they negotiated 6 years ago.
On Wednesday, auto industry officials in the US called for a swift resolution to restore duty-free trade with Canada and Mexico, arguing that tariffs disadvantage them relative to Japanese and South Korean car makers.
Aside from this, Federal Reserve officials made public comments. Mary Daly from the San Francisco Fed observed signs of strength in the US economy and mentioned that increased prices are driven by tariffs and oil shocks. She described current policy as “slightly restrictive" but noted that the Fed must sometimes combat inflation.
On Wednesday, Fed Chair Kevin Warsh stated that inflation expectations had decreased slightly over the past four weeks but reaffirmed that the central bank’s main focus remains on “price stability.”
Money markets are still pricing in a 66% chance of a rate hike at the September 16 meeting, with investors expecting nearly 17 basis points of tightening, according to Prime Terminal data
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades around 17.4818, retaining a mildly bullish near-term tone as spot holds above the cluster of simple moving averages (SMA) from the triple set, with the latest reading near 17.3656 acting as underlying demand. The pair is pressing into a zone defined by two descending resistance trend lines drawn from 18.1651 and the longer-term 21.0808 peak, while the Relative Strength Index (14) at 53.6 stays just above neutral, hinting at steady but not overstretched upside momentum.
On the topside, immediate resistance is located along the nearer downward trend line off 18.1651, with a secondary cap coming from the longer-term descending line originating at 21.0808, both reinforcing the idea of a gradually falling supply barrier above current price. On the downside, initial support sits at the triple simple moving average area around 17.3656, and as long as USD/MXN holds above this base, dips would likely be seen as corrective within the current constructive bias.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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