The Dollar appreciates at three-day highs against the Mexican Peso with the focus on the Fed Minutes

• USD/MXN rises to weekly highs at 16.68.
• The Dollar appreciates in a context of risk aversion in the markets.
• The Fed meeting minutes could give a new boost to the USD.

USD/MXN has moved between a low of 16.59 and a three-day high of 16.68 so far on Wednesday. At the time of writing, the pair is trading above 16.65, gaining 0.10% daily.

The Dollar appreciates before the Federal Reserve Minutes

The Dollar Index (DXY) regains ground for the third day in a row, rising today to 104.93, its highest level in seven days. The context of risk aversion that dominates the markets is favoring the greenback, which also benefits from the hawkish tone of the latest statements by Fed members.

The CME Group's FedWatch tool today places the chances of a first interest rate cut in September at 49.6%. The options for this first reduction to be in November are today at 46.4%.

The Mexican Peso waiting for Super Thursday

Tomorrow Mexico will publish several data that could generate volatility in the MXN. Firstly, inflation for the first part of May will be announced, which is expected to fall 0.22% after increasing 0.09% in the previous reading. For the core CPI, an increase of 0.15% is estimated compared to the previous 0.16% increase. The other relevant data is the final Gross Domestic Product (GDP) for the first quarter, which is expected to be 1.6%, as in the preliminary reading.

USD/MXN Price Levels

If it receives new momentum, the first resistance appears at the intermediate resistance of 16.90, last week's ceiling. Above, the pair can gain momentum towards the psychological zone of 17.00.

On the downside, a break of yesterday's low at 16.52 could trigger a bearish movement towards 16.26, the 2024 low recorded on April 9. Below this level, the main support would be in the 16.07/16.00 zone, where the August 2015 bottoms and the psychological zone are respectively.