Last updated on December 19th, 2024 at 09:55 pm
Also recently the foreign exchange value of the Mexican Peso has been rising against the US Dollar while withstanding global headwinds. In this article we will look at what is behind this development, the important price levels and what might happen in the next couple of weeks.
Current Trends of Mexican Peso Against U.S. Dollar
- Strengthening of the Mexican Peso: In the present analysis, it has been observed that Peso has been appreciated against the Dollar and it is exhibited in daily price movements that depicting strong buying signal have been projected in near past.
- Market Confidence in Mexican Economy: In addition to Peso demand, global investors are getting more confident in Mexico’s economic fundamentals and growth prospects.
- U.S. Dollar Weakness: The Dollar has come under some pressure due to fear relating to interest rate policies and slowing economic growth in the Euro zone, which has given a further boost to the Peso’s appreciation.
What to Expect for USD/MXN in the Near Future
Potential for Continued Peso Gains
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Several factors suggest the Peso may continue to rise in the short term:
- Support from Economic Data: The following economic forecasts are expected to maintain the investors’ interest on the Peso; Mexico has one of the most promising manufacturing exports potential.
- Strong Demand: Trade and investments work to the Peso’s advantage as advances in trading enhances near-shoring and the trading relations between the two nations.
- Resistance Levels to Watch: Trading of USD/MXN is very close to the key resistance level of 20.76 and 20.63. Such a break through these levels may indicate more upside for the Peso.
Risks to Peso’s Strength
While the outlook is favorable, some risks could challenge the Peso’s strength:
- U.S. Economic Recovery: This state of affairs may be influenced by any upbeat or more than anticipated economical data of the United States which will exert some pressure on the USD/MXN lower side.
- Policy Changes: There is the tendency that policies regarding interest rates, particularly those of the US Federal Reserve, would affect the movement of Peso.
- Global Economic Uncertainty: New world currency such as the peso of the members country are volatile to global aspects. The Peso demand could be affected due to economic slow-downs in some of the major trading partners.
Key Levels to Watch in USD/MXN
- Support Levels: Look for confirmation at levels 20.12 and 19.99 and should the Peso rise even higher and the USD/MXN reach these level, it stands to continue the trend.
- Resistance Levels: Around the 20.76 is protecting barrier and the 20.63 is a short-term resistancy level. When the Peso goes over these figures, it will represent the currency’s durable appreciation.
