Mexican bizo slipping due to recession concerns after the fourth -quarter domestic product declined

• Decrease in GDP in Mexico for the fourth quarter for the first time since 2021.
• The Mexican Central Bank reduces growth forecast for 2025 to 0.6%, which is much lower than the Ministry of Finance’s expectations.
• US data mixed: The manufacturing of manufacturing managers improves, but the Servant Procurement Manager Index decreases to the shrinkage area.

The Mexican Biso (MXN) lost some of its power against the US dollar (USD) on Friday, as the Mexican economy slowed in the last quarter of 2024. This indicates that the future view is not promising as expected in light of an environment of uncertainty related to the trade policies of US President Donald Trump. The USD/MXN pair trades at 20.41, recording 0.54%gains.

Mexico’s economy has shrunk in the fourth quarter of 2024 for the first time since the third quarter of 2021, as the INGI statistical agency revealed. GDP (GDP) is identical to estimates on a quarterly basis and decreased compared to previous reading and expectations on an annual basis.

The Bank of Mexico expects that growth will slow down this year by 0.6%, as it revealed the minutes of the last meeting. The ruling council expects the economy to grow by 0.6% in 2025, a decrease of 1.2% that was previously expected, which is much lower than the 2.3% of the Mexican Finance Ministry expectations and less than the City 1% poll.

Due to the background, the USD/MXN pair appears more bullish direction. S&P Global revealed that manufacturing activity in the United States may improve. At the same time, the Servant Procurement Manager Index decreased to the Al -Anskil area for the first time since January 2023.

Other data showed that the existing house sales decreased and that the final reading of the morale of consumer from the University of Michigan (UOM) for the month of February has deteriorated more.

Daily market engines: Mexican bizo is heavy, the economy is expected to retreat

• GDP (GDP) has shrinked by -0.6% on a quarterly basis in the fourth quarter of 2024, a decrease of 1.1% expansion and identical to Reuters poll estimates.
• On an annual basis, Mexico’s economy grew by 0.5% in the fourth quarter compared to 2023 numbers. Growth for the entire year was 1.2%, which is the worst annual number since 2020.
• The monetary policy between the Bank of Mexico and the Federal Reserve (Fed) prefers more bullish direction of the USD/MXN husband. The federal reserve is expected to maintain fixed interest rates, while the Mexico Bank is expected to reduce interest rates again by 50 basis points at the next meeting.
• At the time of writing this report, US President Donald Trump reaffirmed the tariffs by 25% on cars, which will enter into force on April 2.
• Trade conflicts between the United States and Mexico remain at the forefront of events. Although the two countries have previously found a common ground, the USD/MXN traders should know that there is a 30 -day stoppage period and that tensions may arise towards the end of February.

Technical expectations for a USD/MXN husband: Low Mexican bizo with USD/MXN bouncing from 20.20

The USD/MXN pair does not make sharp changes, with a slight tendency towards the upward trend. After the lowest level near the simple moving average reached 100 days at 20.23, buyers paid the pair up. However, the resistance close to 20.40 maintains the circulation of the strange pair.

If USD/MXN exceeds 20.40, the next resistance will be at 20.50, followed by a 20.93 mark on January 17. With more strength, the following main main resistance levels will be 21.00 and the highest level since the beginning of the year (YTD) at 21.28. On the contrary, if the husband decreases below 20.23, the number 20.00 will be the next. The latter’s penetration reveals the lowest level on October 18, 2024 at 19.64, before the moving average 200 days at 19.37.