The Dollar falls to two-day lows against the Mexican Peso after Mexican consumer confidence

• USD/MXN falls to two-day lows at 16.83.
• The Dollar remains above 105.00 after Neel Kashkari's statements.
• Mexico's consumer confidence rises to its highest level since 2019.

USD/MXN has moved sideways for much of Tuesday, after opening the day hitting a daily high at 16.90. Following the release of higher-than-expected Mexican consumer confidence data, the pair has fallen to two-day lows of 16.83.

The Dollar Index struggles to stay above 105.00 after the statements of the Fed members

The Dollar Index (DXY) briefly managed to rise to a two-day high of 105.30 on Tuesday, but subsequently fell to 105.04. The DXY manages to keep the 105.00 zone intact after the statements of Neel Kashkari, president of the Minneapolis Fed, who has assured that the fluctuation in inflation raises doubts about the degree of restriction of monetary policy. Kashkari added that “the advance in inflation observed in the second half of 2023 appears to have stagnated; The question is whether disinflation is still underway or simply taking longer than expected.”

Mexican consumer confidence improves in April, focus turns to Banxico

The National Institute of Statistics and Geography of Mexico (INEGI) has reported today that Mexican consumer confidence rose to 47.7 points in April from 47.4 in March, reaching its best level since July 2019.

After this data, which may imply that inflationary pressures persist if consumers are confident and increase their spending, the Mexican peso has gained some momentum.

The focus for the pair's operators now turns to Thursday, when the April inflation data will be published and the monetary policy decision of Banxicoexpecting interest rates to remain unchanged at 11%.

USD/MXN Key Levels

The Dollar is trading against the Mexican Peso around 16.86 at this time, losing a slight 0.08% on the day. The first support in case the bearish pressure continues is located at 16.82, last week's minimum reached on May 3. A break below this region could lead to a drop towards the 16/50/16.55 area first and 16.26 later (low of 2024 and of the last almost nine years).

To the upside, it is still necessary to firmly break the psychological zone of 17.00 so that the USD/MXN can advance to around 17.25, where the highs of the previous week are.