Mexican Peso holds below 16.95 as traders eye US data, Iran shift

The Mexican Peso holds firm near 10-year highs against the US Dollar on Tuesday, as the USD/MXN pair sits below the 16.95 level while investors digest US economic data and recent developments between the US and Iran. The exotic pair trades at 16.94, virtually unchanged.

USD/MXN steadies near decade low as traders await Core PCE

The emerging market currency was subdued on Tuesday, failing to capitalise on falling US Treasury yields, which dragged the Greenback lower. The US Dollar Index (DXY), which measures the buck’s performance against a basket of six currencies, loses 0.08%, down to 98.90.

In Mexico, the current account recorded a $8.9 billion surplus in Q2 2026. The account rebounded from a revised deficit of $18.23 billion of US Dollars in the first quarter.

Another reason that capped the USD/MXN downtrend was geopolitics. The US Secretary of State Marco Rubio said to foreign counterparts that the US is shifting from strikes to sanctions on Iran that for the time being, the US is not expected to initiate new strikes against Iran, according to sources cited by Axios.

US data revealed that the Conference Board (CB) Consumer Confidence index missed estimates, but showed that households' views of current business conditions improved modestly in August, while they also see an improvement in the jobs market. US housing data showed that Building Permits in July improved, while the ADP Employment Change 4-week average crushed the previous week's print, indicating the strength of the jobs market.

Boston Fed President Susan Collins adopted a hawkish tone, emphasising that inflation remains excessively high. Nevertheless, she observed that the economy continues to expand at a near-trend pace and acknowledged that the labour market remains consistent with full employment.

Eyes focus on the Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditures (PCE) Price Index, before Fed Chair Kevin Warsh’s speech at Jackson Hole. The US schedule includes Durable Goods Orders, GDP figures, and Initial Jobless Claims.

USD/MXN Price Forecast: Technical Outlook

In the daily chart, USD/MXN trades at 16.9481, keeping a bearish near-term tone as spot holds below the clustered simple moving averages (SMA) around 17.3288 and under the shorter-term descending trend line resistance near 17.3594. This configuration suggests rallies remain capped within a broader downtrend, while the Relative Strength Index (14) hovering near 31 hints at oversold conditions that could slow the pace of further losses rather than signal an immediate reversal.

On the topside, initial resistance is seen at the SMA cluster around 17.33, followed by the descending trend line barrier near 17.36, where sellers are likely to re-emerge if the pair attempts a corrective bounce. On the downside, the day’s open at 16.95 acts as the first pivot support, with a more significant structural floor coming in at the longer-term descending trend line break level around 15.49, which would only come into view if bearish pressure extends materially in the sessions ahead.