The Mexican Peso (MXN) strengthened against the US Dollar (USD) on Tuesday following the inauguration of President Claudia Sheinbaum and her speech in the Mexican Congress. Sheinbaum’s reassurances about investor security contributed to the peso’s appreciation.

Market Sentiment and Economic Factors:

• Geopolitical Risks: The heightened tensions in the Middle East and a downbeat market mood in Wall Street supported the US Dollar as a safe-haven asset, which negatively impacted the Mexican Peso.
• US Economic Data: The US released the August JOLTS report and ISM Manufacturing PMI, which showed mixed results.
• Fed Rate Expectations: Federal Reserve Chair Jerome Powell indicated that the central bank is not in a hurry to lower interest rates and expects a 50 basis point cut by the end of 2024.

USD/MXN Mexican Peso Outlook:

• The USD/MXN pair is expected to remain upwardly biased due to the Fed’s stance and geopolitical risks.
• Banxico is anticipated to lower interest rates by 175 basis points by the end of 2025.

USD/MXN Technical Analysis:

• The USD/MXN uptrend remains intact, with the RSI indicating bullish momentum.
• A break above 20.00 could lead to further gains, with potential resistance levels at 20.22 and 20.57.
• Downside support levels are at 19.50, 19.23, and 19.06.