Mexican Peso flatlines as traders brace for Mexico’s fiscal package

The Mexican Peso remains unchanged against the US Dollar on Tuesday as market participants await the release of Mexico’s Fiscal package, which will be delivered to the Mexican Congress for approval. At the time of writing, the USD/MXN trades at 16.91 flatlined.

USD/MXN steadies as fiscal plan and US inflation loom

On September 2, Mexican President Claudia Sheinbaum stated that she will unveil a “responsible” 2027 fiscal and budget plan that aims to achieve fiscal consolidation while avoiding restrictions on investment or spending in social welfare, health, and education.

Banamex, a Mexican local bank, warned that “the main risk is that, given the rigidity of an increasing share of the budget, the adjustment to public spending will fall on public investment, with negative implications for medium-term economic growth.”

Aside from this, Mexico’s economic docket will feature August inflation data on September 9, followed by Industrial Output figures on September 11.

Across the northern border, the New York Survey of Consumers revealed that households' inflation expectations edged lower in the mid-term, while expectations for the jobs market remained mixed.

A light US economic docket keeps investors focused on Thursday's Producer Price Index (PPI) release, followed by Friday’s Consumer Price Index (CPI) data. A jump in both figures could cement the case for a 25-basis-point rate hike by the Fed.

Money markets had priced in a 63% chance of a 25-basis-point rate hike by the Federal Reserve at the September 15-16 meeting.

Given the backdrop, this would reduce the interest rate differential between Mexico and the US. Hence, USD/MXN could quickly reclaim the 17.00 level, opening the door for further upside.

USD/MXN Price Forecast: Technical Outlook

In the daily chart, USD/MXN trades at 16.9156, keeping a bearish near-term tone as spot holds beneath the clustered 50-, 100- and 200-day simple moving averages (SMAs) now aligned around 17.2285 and under the broader sequence of descending trend-line resistances. The Relative Strength Index (14) hovers near 35, hinting at weak but not yet oversold downside momentum as the pair consolidates just above recent lows.

On the topside, immediate resistance is seen at the confluence of the longer-dated SMAs near 17.2285, which aligns with the broader downward-sloping trend structure and is likely to cap recoveries while price trades below it. On the downside, initial support comes at the horizontal floor around 16.8866; a daily close below this level would expose further weakness within the prevailing downtrend, while holding above it would keep the pair in a shallow consolidation beneath the broader resistance zone.