The history of the Mexican peso, which dates back to colonial times, when it was a unit of measurement of weight for trade. Since its birth as the official currency in 1821, the peso has gone through various stages, from stability to devaluation, influenced by events such as the Mexican Revolution and world wars.
In 1931, the creation of the Bank of Mexico brought greater stability, and in 1993 the New Mexican Peso was introduced, eliminating zeros and facilitating transactions. Today, the peso remains a relatively stable currency and one of the most widely used in Latin America, a symbol of Mexico's strength and economic evolution.
What is the USDMXN currency pair?
As with other currencies, before understanding the USDMXN investment strategy, you need to understand what makes up this pair. The USDMXN or USD/MXN currency pair represents the amount of Mexican pesos it takes to buy one U.S. dollar. For example, if the exchange rate is 16.50, it means that 16.50 Mexican pesos are needed to buy one U.S. dollar.
You can trade the USD/MXN pair on the tradeApp platform. Test your knowledge with a TradeApp.com account.
How do you trade the USDMXN pair? The Art of Forex Trading
There are several ways to do this. First, investors can participate in the foreign exchange or Forex market, buying and selling currency pairs through online trading platforms.
Another option is to invest in specialized currency investment funds, managed by asset management firms, such as the S&P/BMV, which replicates the trajectory of the USD MXN.
They may also opt for derivative financial instruments, such as futures and options contracts, or Use Contracts for Difference (CFDs) on authoritative platforms such as TradeApp, where traders can speculate on the movement of the exchange rate, either upwards or downwards.
In both cases, movements and speculation are important to the core activity of trading: making money.
Main Causes of Impact on the USDMXN Pair
The dollar has a significant impact on the Mexican peso (MXN). Thanks to its territorial proximity, the U.S. economy has a lot of influence in Mexico's, so practically all financial models are 'fixed' in the dollar in order to survive.
The value of the peso against the dollar has an impact on various sectors, such as foreign trade, foreign investment, tourism, domestic consumption, remittances, etc.
In 2024, the dollar is expected to have a significant impact on the Mexican peso. Several factors will influence the behavior of the exchange rate (and therefore the trading of the USD/MXN pair), including:
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U.S. monetary policy: The Federal Reserve's decisions on interest rates can affect the value of the dollar globally.
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Mexico's Economic Growth: Higher economic growth can strengthen the peso by increasing confidence in the Mexican economy.
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Oil Price: Fluctuations in the price of oil impact the Mexican economy and, therefore, the exchange rate.
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Inflation: Higher inflation in Mexico can weaken the peso (or vice versa)
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Political context: relevant political events can impact confidence in the peso, For example, in 2024 there will be elections in both countries, something that can affect.
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Remittances: Since the pandemic, remittances have been an important element for the Mexican economy. Their behavior can influence the context of trading.
Conclusion
The USDMXN currency pair allows you to speculate on the exchange rate between the U.S. dollar and the Mexican peso. Its value is influenced by a number of economic and geopolitical factors, making it a dynamic market to trade.
In addition, the forex market is open 24 hours a day, which provides great flexibility for all people who wish to trade at any time.
The USD/MXN pair is an interesting option due to its high liquidity and money-making opportunity. One is a consolidated currency and the other is emerging, so there will always be significant changes in price on a daily basis.
Sometimes the trend is upward for the Mexican peso (as in 2023 and 2024), while at other times it is upward for the dollar. Doing news research, analyzing resistances, and learning will be your most important weapons when trading the USD/MXN pair.
We recommend reading the news every morning. Anything can influence the USD/MXN pair, so it's important to always be informed. In addition, on social networks and specialized pages such as TradeApp you can check the real-time price of the Dollar and the Mexican peso, ideal for when you want to trade.