The Mexican Peso remained unchanged against the US Dollar on Tuesday, with the USD/MXN pair trading at 16.91 as market participants awaited the release of Mexico’s Fiscal package, which is set to be delivered to the Mexican Congress for approval [1]. Mexican President Claudia Sheinbaum announced plans to unveil a 'responsible' 2027 fiscal and budget plan aimed at achieving fiscal consolidation without restricting investment or spending in social welfare, health, and education [1].
Banamex, a local Mexican bank, cautioned that the rigidity of an increasing share of the budget could result in adjustments to public spending falling on public investment, potentially having negative implications for medium-term economic growth [1]. Upcoming economic data releases include Mexico’s August inflation data on September 9 and Industrial Output figures on September 11 [1].
In the US, the New York Survey of Consumers indicated that households' inflation expectations edged lower in the mid-term, while jobs market expectations remained mixed. Investors are also focused on the upcoming Producer Price Index (PPI) release on Thursday and Consumer Price Index (CPI) data on Friday. A significant increase in both figures could strengthen the case for a 25-basis-point rate hike by the Federal Reserve, with money markets pricing in a 63% chance of such a hike at the September 15-16 meeting [1]. This scenario would reduce the interest rate differential between Mexico and the US, potentially allowing USD/MXN to reclaim the 17.00 level and opening the door for further upside [1].
From a technical perspective, USD/MXN trades at 16.9156, maintaining a bearish near-term tone as it remains below the clustered 50-, 100-, and 200-day simple moving averages (SMAs) aligned around 17.2285. The Relative Strength Index (14) is near 35, indicating weak but not oversold downside momentum as the pair consolidates above recent lows. Immediate resistance is seen at the SMAs near 17.2285, while initial support is at 16.8866; a daily close below this level could expose further weakness within the prevailing downtrend [1].
CONCLUSION
The Mexican Peso is currently stable as traders await key fiscal and economic announcements from both Mexico and the US. The upcoming fiscal package and US inflation data could significantly impact USD/MXN, especially if the Federal Reserve raises rates. Technical indicators suggest a bearish tone for USD/MXN, with potential for further downside if support levels are breached.