The Mexican Peso maintains its strength as the US Dollar stays under pressure

The Mexican Peso (MXN) continues its steady climb against the US Dollar (USD) on Monday, as market sentiment remains cautious due to uncertainty surrounding the US economic outlook. Key concerns include President Donald Trump’s tariff threats and the country’s growing fiscal challenges. With US markets closed for Memorial Day, thin liquidity has done little to disrupt the MXN’s momentum, with USD/MXN trading around 19.22, down 0.18% at the time of writing.

Investors are keeping a close eye on US Treasury yields and upcoming comments from Federal Reserve officials, but limited market activity due to the holiday is likely to mute any significant short-term volatility. The fate of the USD/MXN pair this week will hinge on major US economic data and the release of the Fed meeting minutes scheduled for Wednesday.

Particularly crucial will be Friday’s release of the Fed’s preferred inflation gauge — the core Personal Consumption Expenditures (PCE) index for April — along with the University of Michigan’s consumer sentiment survey. These data points are expected to shed light on inflationary trends and American consumers' economic outlook, both of which may shape expectations around the timing of potential Fed rate cuts.

Mexican Peso Daily Digest: USD/MXN under pressure amid Dollar softness

• USD/MXN continues to feel pressure as the US Dollar weakens on the back of a deteriorating fiscal outlook, a recent US credit rating downgrade, and growing expectations of increased national debt. The bond market has also seen recent turbulence, further undermining the Greenback’s strength.
• President Trump’s decision to postpone the imposition of 50% tariffs on EU imports until July 9 provided relief to global markets and sparked a modest risk-on rally, weighing further on USD demand. His Friday threats to also target Apple and Samsung smartphones with a 25% tariff had rattled investors, but the temporary pause in escalation has bought time for negotiations.
• Nevertheless, Trump’s continued tariff rhetoric toward global partners continues to erode investor confidence, contributing to the Dollar's struggle to maintain its status as the world’s reserve currency. Additional economic insight will be offered this week through Tuesday’s US Consumer Confidence figures and Wednesday’s release of the FOMC meeting minutes.

Mexican Peso Technical Analysis: USD/MXN eyes October low as pressure builds

USD/MXN remains firmly entrenched in a downward trend, recently touching a fresh 2025 low just under 19.20. The pair is trading below both the 10-day and 20-day Simple Moving Averages (SMA), currently at 19.34 and 19.47, which serve as dynamic resistance zones.

Momentum indicators remain bearish, with the Relative Strength Index (RSI) at 35.79 — indicating continued downside pressure without yet signaling oversold conditions. The next key support lies at the October 2023 low of 19.11, which now becomes the primary level to watch.

Should the pair breach this level convincingly, further downside toward the psychological 19.00 mark may follow. On the flip side, any corrective rebound would need to break above 19.47 to neutralize short-term bearish momentum and signal a potential trend shift.

USD/MXN daily chart