Mexican Peso sinks as US-Mexico trade talks stall
The Mexican Peso (MXN) losses ground against the Greenback on Friday amid broader US Dollar (USD) weakness, as Mexico’s economic docket is absent, leaving traders leaning into US dynamics. At the time of writing, USD/MXN trades at 18.49, up 0.47%, on track for the sixth consecutive weekly gain.
The Mexican Peso (MXN) weakened against the US Dollar (USD) on Friday due to the lack of progress in US-Mexico trade talks. When the talks were reported to be stalled by Commerce Secretary Howard Lutnick's opposition to reducing 25% tariffs on Mexican autos and 50% levies on steel and aluminum, the peso faced downward pressure. In the US, industrial production rose 0.7% month-over-month, surpassing expectations, signaling a positive economic sign.
However, traders were more focused on the recent inflation data and the Federal Reserve's potential December rate hike. Fed Chair Kevin Warsh discussed various topics at the IMF meeting, including the global economy and the AI boom, but his comments about the future of interest rates signaled a lack of immediate tightening, which negatively impacted the USD.
Looking ahead, Mexico's economic calendar will be busy with Retail Sales, mid-month inflation releases, jobs data, and the Economic Activity indicator, while the US will focus on housing data, Initial Jobless Claims, and Flash PMIs. Technical analysis suggests a bullish near-term bias for USD/MXN, with the pair currently supporting above 16.8866, but traders should remain cautious of the 18.1200 support level.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
