- USD/MXN falls to two-day lows at 18.24.
- The US dollar gives ground before the opening of Wall Street.
- US core PCE inflation rises 2.6% year-on-year in May, in line with expectations.
The USD/MXN rose sharply at the opening on Friday, boosted by renewed US Dollar strength on the forex board. The pair hit 17-day highs at 18.59 during the Asian session but has subsequently eased ground to fall to two-day lows at 18.24 just before the Wall Street open.
US Dollar Depreciates Following US PCE
The Underlying Price Index of Personal Consumption Expenditure (PCE) of the United States showed an increase of 2.6% annually in May after growing 2.8% in April, as published by the Bureau of Economic Analysis. The figure, which is in line with expectations, is the lowest since March 2021.
He PCE The monthly underlying rate moderated to 0.1% from 0.3% previously (revised upwards from 0.2%), meeting expectations and reaching its lowest level in five months.
The US Dollar Index (DXY) has bounced following the release, initially falling to a daily low of 105.79. At the time of writing, the greenback is trading above 105.89, losing 0.04% on the day.
Later in the day, the focus will be on the Chicago PMI for June, which is expected to rise to 40 points from 35.4 in May. Subsequently, the University of Michigan Consumer Sentiment Index for June will be in focus, expected to rise to 65.8 from 65.6. The 5-year inflation component of the indicator would remain at 3.1%.
In Mexico, yesterday the Banxico monetary policy decisionwhich kept its interest rates at 11%, raising its forecast for inflation at the end of 2024. Tonight, the country will reveal its fiscal balance for May.
USD/MXN Levels
Short-term technical indicators point lower at the end of the week, although the USD/MXN four-hour chart remains bullish. In case of further decline, the first support is at the 100 moving average on the one-hour chart around 18.20. Below, a break of the psychological zone of 18.00 would point to 78.87, last week’s bottom.
On the upside, exceeding this week’s maximum recorded today at 18.59 would have a target of 18.63, last week’s ceiling (June 17). Above, the main barrier will be at 18.99/19.00, monthly top and round level, respectively.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
