Mexican Peso holds recent gains as traders await Consumer Confidence data and trade talks outcome

• The Mexican Peso holds onto recent gains ahead of April's Consumer Confidence data, a key gauge of domestic sentiment that could influence Banxico's next move.
• Optimism over US-China trade talks due on Saturday continues to drive sentiment, indirectly supporting the Peso and other emerging market currencies.
• USD/MXN remains vulnerable to Fed policy signals ahead of Banxico's upcoming rate decision, with divergence likely to shape near-term direction for the pair.

The Mexican Peso (MXN) is trading broadly flat against the US Dollar (USD) in Friday's European session, as attention turns to upcoming Mexican Consumer Confidence data and a series of Federal Reserve (Fed) speeches, as traders head towards the weekend focusing on the US-China trade discussions to be held on Saturday.

At the time of writing, USD/MXN is hovering near 19.51, down 0.03%, with further moves likely driven by sentiment shifts around Fed policy signals, domestic economic data, and global trade developments.

Mexican Peso awaits Consumer Confidence data

At 12:00 GMT, Mexico's National Institute of Statistics and Geography (INEGI) will release April's Consumer Confidence figures. The previous reading stood at 46.

This index reflects households' views on the economy, job prospects, and future financial conditions. A stronger reading signals increased optimism and potentially higher domestic spending, which would support the Peso. Conversely, a weaker print may signal economic unease, adding pressure to the currency.

Fed speakers pose an additional threat to the Mexican Peso

Another major driver for USD/MXN is the interest rate differential and policy divergence between Banxico and the Federal Reserve. With central banks globally still focused on curbing inflation, markets are closely watching a series of speeches today from Fed officials after their decision to leave US interest rates stable on Wednesday.

The USD/MXN pair is likely to be driven by a packed schedule of Federal Reserve speakers on Friday, with key voting members, including Governors Adriana Kugler, Lisa Cook, and Christopher Waller, delivering remarks that could influence expectations for US monetary policy. Markets will be particularly sensitive to any hawkish signals amid ongoing uncertainty about the Fed's next move. 

The speeches by known hawks like Kugler and Musalem may tilt sentiment toward a stronger US Dollar (USD) if they reinforce the case for holding rates higher for longer. 

Meanwhile, multiple appearances at the Hoover Monetary Policy Conference raise the chance of coordinated or reinforcing messages on inflation and rate strategy.

Mexican Peso daily digest: USD/MXN fundamental drivers

• Over the weekend, Treasury Secretary Scott Bessent and Jamieson Greer will meet with Chinese officials in Switzerland. President Trump's remarks that he "could lower tariffs on China if talks go well" on Thursday, following the announcement of the US-UK trade deal, have improved market sentiment, offering support to the Peso and other emerging market currencies by boosting appetite for risk.
• As an Emerging Market (EM) currency, the Peso is particularly sensitive to shifts in risk sentiment and heavily reliant on exports to the US, which account for roughly 80% of Mexico's total exports. 
• Recent US tariff announcements on aluminium, steel, and autos - as well as the potential for additional levies outside the USMCA - have raised concerns about Mexico's growth outlook and added to economic uncertainty.
• The Banxico is expected to cut rates by between 25 and 50 basis points (bps) at its next meeting on May 15. 
• Mexico's April inflation report, released on Thursday, showed price growth accelerating to 3.93% YoY, above the 3.90% forecast. Core inflation rose 0.49% MoM, up from 0.43% in March and exceeding expectations of 0.47%.
• The upside surprise in both headline and core figures signals persistent underlying price pressures. Still, as inflation remains within the central bank's target range of between 2% and 4%, markets widely expect the Banxico to cut rates next week.

USD/MXN technical setup: Bearish pressure persists below 19.600

USD/MXN remains under pressure, trading just above key support at 19.50, with the broader trend still pointing lower. 

The pair is struggling to reclaim the 10-day Simple Moving Average (SMA) at 19.59, which continues to act as dynamic resistance. 

Price action remains capped by a descending trendline from the April decline, reinforcing bearish momentum. 

For bulls to gain traction, a move above the 10-day SMA and a break above the 19.60 psychological level may provide the opportunity for USD/MXN to continue toward the May high at around 19.78.

Meanwhile, a move below 19.50 and a daily close below the April low of 19.47 could expose further downside. 

The Relative Strength Index (RSI) at 38.35 suggests bearish momentum without being oversold, indicating that there's still room for sellers to stay in control unless a fundamental catalyst triggers a reversal.

USD/MXN daily chart