The Dollar falls to daily lows below 17.00 against the Mexican Peso

• USD/MXN returns below 17.00 after the Wall Street open.
• The Dollar takes a breather after the slight decline in US bond yields.
• The focus turns to the speeches of the members of the Fed.

The USD/MXN reached a nearly seven-week high at 17.08 yesterday, Tuesday. The pair retested this ceiling in the European morning on Thursday, but after the opening of Wall Street it has fallen to a daily low of 16.86. At the time of writing, the Dollar is trading against the Mexican Peso above 16.95, losing 0.70% daily.

Dollar moderates as US bond yields decline

The Dollar Index (DXY) rose to its highest level in five months at 106.51 yesterday. Although during the first part of Wednesday, the greenback has remained firm near yesterday's highs, it has subsequently moderated to around 106.05. In the last few minutes, the index is moving around 106.20/106.25.

The greenback has given ground following the yields of the US 10-year Treasury bonds, which are currently losing 0.71% to stand at 4.62%. Two-year bonds, yields are now down 0.26%.

Following yesterday's comments by Fed Chairman Jerome Powell, confirming that there will be a delay in the first interest rate cut, the CME Group's FedWatch tool today places the chances of a cut at the Fed meeting at 18.8%. June Federal Reserve. For July, the probabilities are at 3.7%, while for September they rise to 45.9%.

The focus for the remainder of Wednesday will be on the comments of the Fed members who will speak in the American afternoon. Speeches by Loretta Mester, president of the Cleveland Fed, and Michelle Bowman, governor of the entity, are scheduled.

USD/MXN Price Levels

With the hourly chart maintaining a clear bullish bias, a continuation higher in the USD/MXN would have to face initial resistance in the 17.08/17.11 zone, where the highs of yesterday and today are and the highest levels of the end of February. Higher up, the main barrier is at 17.38, the 2024 ceiling recorded in January.

On the downside, around 16.50/16.55 will mark a support zone due to concentrating some areas of daily highs and lows last week. Below, a major containment zone awaits at the nearly nine-year low reached on April 9 at 16.26.

One hour chart