Mexican Peso Stabilizes Ahead of Key U.S. Economic Data

Mexican Peso Stabilizes Ahead of US Consumer Confidence and Durable Goods Orders Releases

The Mexican Peso (MXN) is stabilizing against the US Dollar (USD) on Tuesday as investors turn cautious ahead of two key U.S. economic indicators: the Consumer Confidence Index and Durable Goods Orders. These reports are expected to offer fresh insight into the health of the U.S. economy and could influence the Federal Reserve's interest rate trajectory.

The USD/MXN pair is currently holding around trendline resistance at 19.29, with the overall trend still biased to the downside. The pair has been in a downtrend since April, and while short-term volatility has pushed prices up slightly, broader pressure on the U.S. Dollar continues to limit upside potential.

The Peso’s slight pullback comes amid increased demand for safe-haven assets and a temporary halt in bond market selling following the U.S. Memorial Day weekend. Despite a minor rebound in risk appetite, market participants remain alert to hawkish comments from Federal Reserve officials.

Minneapolis Fed President Neel Kashkari recently reiterated the central bank’s cautious stance, noting that trade uncertainty and inflation risks may keep interest rates elevated for longer. His comments added to the growing sentiment that the Fed may delay any rate cuts well into 2025, boosting short-term support for the Greenback.

Nonetheless, unless upcoming U.S. data surprises strongly to the upside, USD/MXN is likely to remain range-bound or resume its downward momentum in line with its broader trend.