Mexican Peso firms as softer US data boosts risk appetite

• Mexican Peso appreciates as USD/MXN slips to 19.56 on hopes for US tariff relief.
• Wall Street gains spark demand for riskier assets like the Mexican Peso.
• Trump hints at easing auto tariffs; potential trade deals with India or South Korea eyed.
• Traders await Mexico's Q1 GDP and US Core PCE data for fresh direction.

The Mexican Peso (MXN) appreciated against the US Dollar (USD) after touching a daily low of 19.65, as risk appetite improved following the release of softer-than-expected data. At the time of writing, USD/MXN trades at 19.56, down 0.12%.

Wall Street closed with gains, depicting an upbeat market mood and appetite for risk-sensitive currencies like the Peso. The Wall Street Journal revealed that US President Donald Trump might soften the impact of automotive tariffs. Traders cheered this and US Commerce Secretary Howard Lutnick's comments about a trade deal pending approval, which, according to the WSJ, could be with India or South Korea.

In the US, the agenda featured the US Job Labor and Turnover Survey (JOLTS) report for March, which was dismal and missed estimates. At the same time, US Consumer Confidence deteriorated in April, with households growing pessimistic about future expectations on the economy.

In Mexico, the economic docket was absent on Tuesday as traders await the release of Gross Domestic Product (GDP) figures for the first quarter of 2025. On the US as well, USD/MXN traders are eyeing the release of GDP figures for the first quarter and the Federal Reserve's (Fed) preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index.

Daily digest market movers: Mexican Peso edges up awaiting GDP data

• Mexico's economic data revealed on Monday showed that the Balance of Trade printed a surplus and that labor market conditions remain solid as the Unemployment Rate ticked lower in March compared to February
• Economic data revealed last week showcasing the ongoing economic slowdown as Retail Sales in February missed estimates. However, not all has been said, as traders await GDP for Q1.
• The latest inflation report showed that prices edged up in the first half of April, revealed INEGI.
• Last week, Banxico's Deputy Governor Omar Mejia Castelazo revealed that the economy has been undergoing a slowdown since Q4 2023, he said in Washington.
• According to Citi Mexico's expectations survey, Mexico's economy is expected to grow 0.2% in 2025, below the 0.3% projected in the prior survey.
• The US Department of Labor reported that JOLTS job openings dropped to 7.192 million in March, the lowest since September, missing the 7.5 million forecast and down from 7.48 million previously, pointing to softening labor demand.
• Similarly, the Conference Board's Consumer Confidence Index fell sharply to 86.0 in April, its lowest in nearly five years, down from 93.9 and below the 87.5 estimate, highlighting growing consumer pessimism.

USD/MXN technical outlook: Mexican Peso remains bullish as USD/MXN stays below 200-day SMA

USD/MXN remains downward biased after breaking below the 200-day Simple Moving Average (SMA) at 19.94, fueling the drop toward yearly lows at 19.46. Sellers remain in control, but a daily close below 19.46 is needed to open the door for a test of the 19.00 psychological level.

On the flip side, a move back above the 200-day SMA could allow buyers to retake momentum, targeting 20.00 initially, followed by the 20-day SMA at 20.15 if momentum builds.