Mexican Peso dips on Middle East tensions, eyes on FOMC minutes

The Mexican Peso faltered on Tuesday, slipping about 0.16% against the US Dollar as traders awaited the Federal Reserve's concluding meeting minutes. Tensions in the Middle East and the outcome of the US-Iran conflict loomed over the market, with no resolution in sight. The USD/MXN pair traded at 17.06, having rebounded from a daily low of 17.02.

The US-Iran standoff was the headline news, with CNN reporting that Trump had instructed top administration envoys to cease discussions with Iran. Additionally, Trump stated that the US Navy blockade remained in effect, while US data showed a decline in Housing Starts and Industrial Production, both below expectations. The US Dollar Index increased by 0.07% during the day.

In Mexico, traders were focusing on Banxico's meeting minutes on Thursday and Retail Sales on Friday, August 21. The Peso's decline was influenced by uncertainty surrounding the revision of the USMCA trade agreement. The Moving Average Triple (50, 100, 200) stood at 17.3607, above the current spot price, suggesting a bearish short-term trend.

Momentum was modest, with the Relative Strength Index at 33.19, indicating that selling pressure might be easing rather than reversing. If the USD/MXN pair remains below key support levels, the peso's value is likely to remain under pressure.