Mexico Peso Gains On Improved Market

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Mexico Peso Gains On Improved Market

Mexico Peso Gains On Improved Market Sentiment

The market sentiment has turned positive, allowing the Mexican Peso (MXN) & other riskier assets to trade higher. At the same time, positive gains were seen in the Shanghai Composite and Hang Seng Index, which shows that MXN is benefiting from a broader market shift.

For now, USD/MXN is trading at 17.08 with a -0.45% change, while the GBP/MXN is trading at 21.40 with a negative trend. Additionally, the EUR/MXN is trading near 18.29 with a change of -0.28%.

China Provides Support To Mxn

But what caused the market sentiment to turn positive? It is speculated that China will likely loosen some of its property policies. If this happens, it will provide relief to the struggling property sector & even drive growth.

Additionally, positive results from tech giants like Microsoft and Google have also led to stock gains in the US market. So, that's also a factor that has indirectly helped the MXN.

If we look at the upcoming data, the unemployment rate has shown the resilience of the Mexican labor market. The reading was 2.3% against the earlier reading of 2.5%. This is a sign that unemployment in Mexico has gone down by 0.2%.

The balance of trade data also showed that Mexico managed a $2.098 billion trade surplus during March, while the value during the same period last year was $1.195 billion. Once again, that's a positive for the MXN and has allowed it to gain ground against the EUR, USD, and GBP.

For now, there's little chance that the Central Bankk of Mexico will use this data as a basis for interest rate cuts. This means the Mexican Peso can also garner strength from the fact that higher rates will stay for a long.

For now, the USD/MXN is showing some sideways trading with the low point in the 16.80s while the high end of the range is near the 17.40s. In the short-term, the bias is titled towards the MXN but that could change if the US bond yields resurge higher.

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