By Antonio Di Giacomo, Senior Market Analyst at XS.com
The Mexican peso began the February 4 session with a slight depreciation against the U.S. dollar, trading around 17.35 pesos per dollar after rebounding from a low near 17.20. The move reflects a technical adjustment following the recent strength of the local currency and a renewed uptick in the dollar across international markets. The strengthening of the greenback occurred amid heightened global caution
following January’s ADP private employment report, which showed job creation below expectations. While the data was not strong enough to trigger a pronounced risk-off move, it did reinforce the perception of a gradually moderating U.S. labour market.
In this environment, the dollar index posted moderate gains, also supported by developments in the global foreign exchange market. The persistent weakness of the Japanese yen pushed the dollar higher against a basket of currencies, indirectly pressuring emerging-market currencies, including the Mexican peso. Additionally, the operational reopening of the U.S. government allowed investors’ attention to return to economic indicators and monetary policy expectations. The normalisation of information flows has reduced temporary market distortions but also increased sensitivity to macroeconomic surprises.
In intraday terms, the Mexican currency was down about 0.14%, while the dollar was up roughly 0.11%. This behaviour suggests that, for now, the move is driven more by external factors than by any deterioration in local fundamentals, which remain relatively solid.
From a technical perspective, the USD/MXN exchange rate shows mixed signals. The rebound from the 17.20 area confirms the presence of a relevant support level, though the inability to sustain moves below it keeps short-term upward pressure intact.
The range between 17.20 and 17.35 has become a key market zone. As long as the exchange rate remains within these levels, a sideways pattern is likely to prevail, with volatility driven by economic data releases and shifts in global sentiment. In the coming days, investors will focus on the release of services and manufacturing PMI indices in the United States and other major economies. These indicators could provide clearer signals about the pace of economic activity and, in turn, help define the next direction for the peso against the dollar.
In conclusion, the Mexican peso starts February on a cautious note, driven mainly by the dollar and the international macroeconomic backdrop. In the absence of clear catalysts, USD/MXN may continue to fluctuate within its current range, with investors closely watching upcoming economic data for greater clarity on growth and monetary policy prospects.