The Mexican Peso remained firm against the US Dollar, with the USD/MXN pair trading at 16.95, virtually unchanged, as the Bank of Mexico (Banxico) adopted a cautious approach to monetary policy. This stance helped support the Peso, even as US jobs data indicated a stable labor market, with jobless claims for the week ending August 15 coming in at 206,000—better than the forecast of 210,000 and the previous print of 212,000 [1].
Economic data from Mexico showed modest growth, with the national statistics agency INEGI reporting a 0.1% increase in July and a 0.2% month-on-month estimate for June, suggesting a slowdown in Q3. Annually, the Mexican economy grew 2.7% year-over-year in July, up from 2% in June, partly attributed to the hosting of the World Cup [1]. Retail sales data, set to be released on Friday, is expected to show a rise from -0.6% in May to 0.1% month-on-month in June, and a year-on-year increase from 1.6% to 3.1% [1].
On the international front, Canadian Prime Minister Mark Carney and Mexico’s President Clauda Sheinbaum discussed the importance of renewing the USMCA trade agreement as soon as possible [1]. In the US, Treasury yields rose, with the 30-year yield up nearly 6 basis points to 5.348% following a bond buyback [1]. Federal Reserve officials provided mixed signals: St. Louis Fed President Alberto Musalem maintained a hawkish stance, recommending a rate hike at the July meeting, while San Francisco Fed's Mary Daly noted that rising long-term bond yields are a global issue and do not see Fed credibility at risk [1].
From a technical perspective, USD/MXN trades at 16.9568, maintaining a bearish near-term tone as it remains below the 50-, 100-, and 200-day simple moving averages clustered around 17.3454. The Relative Strength Index (RSI) at 28.98 indicates oversold conditions, suggesting the recent decline may be stretched, though sellers still control the trend [1].
CONCLUSION
The Mexican Peso's stability is underpinned by Banxico's cautious monetary policy and modest economic growth, despite strong US labor data and rising US Treasury yields. Technical indicators suggest the Peso may be oversold, but the broader trend remains bearish for USD/MXN. Market participants are watching upcoming Mexican retail sales data and ongoing USMCA trade discussions for further direction.