- USD/MXN gains 0.70% at the close of the American session.
- The judicial reform was approved by the Deputies with 357 votes in favor and 130 against.
The USD/MXN marked a daily low at 19.67, where it found aggressive buyers who pushed the pair to a daily high at 19.95. Currently, the price of the US dollar against the Mexican Peso is trading at 19.93, gaining 0.70% today.
Judicial reform is approved by the Chamber of Deputies in an alternate venue amid protests
After a marathon day, the Chamber of Deputies approved in particular and in general the judicial reform of the ruling party Morena, in an alternate venue located in the Magdalena Mixhuca Sports Unit, due to protests by students and members of the Judicial Branch of the Federation in the Legislative Palace of San Lázaro.
The judicial reform contemplates that judges, magistrates and ministers of the Supreme Court of the Nation (SCJN) be elected by popular vote. In addition, it proposes the reduction of the SCJN members from 11 to 9 and the elimination of its two chambers.
The ruling will now be forwarded to the Senate of the Republic for discussion and voting.
Technical levels in the USD/MXN
Volatility in the Mexican Peso has been present in recent sessions, maintaining a clear upward trend and establishing short-term support at 18.59, given by the pivot point of August 16. The next key support is found at 17.62, the minimum of July 12. The closest resistance is at 20.06, the maximum of August 5. The Relative Strength Index is at 65.56, above the midline of 50, showing us the buying strength with intentions to overcome the resistance of 20.06 in the next sessions.
USD/MXN Daily Chart
US Dollar FAQs
The United States Dollar (USD) is the official currency of the United States of America, and the de facto currency of a significant number of other countries where it is in circulation alongside local banknotes. As of 2022, it is the most traded currency in the world, accounting for over 88% of all global foreign exchange transactions, equivalent to an average of $6.6 trillion in daily transactions. Following World War II, the USD took over from the British Pound as the world’s reserve currency.
The single most important factor influencing the value of the US dollar is monetary policy, which is determined by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and to promote full employment. Its main tool for achieving these two goals is to adjust interest rates. When prices rise too quickly and inflation exceeds the Fed’s 2% target, the Fed raises rates, which helps the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a jammed financial system. It is an unconventional policy measure used when credit has dried up because banks are not lending to each other (for fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis of 2008. It involves the Fed printing more dollars and using them to buy US government bonds, primarily from financial institutions. QE typically leads to a weakening of the US dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal of maturing securities in new purchases. It is generally positive for the US dollar.
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.
