The Dollar remains above 17.00 against the Mexican Peso at the beginning of a week with key data from the US and Mexico

• USD/MXN fell to around 17.00 in the first part of Monday, but rose to 17.23 after the Wall Street open.
• The Dollar has gained strength after the publication of the Chicago Fed activity index and the decrease in expectations about the Fed's rate cuts.
• Mexico will publish this week its inflation figures for the first half of April and unemployment for March.

The USD/MXN has opened the day with a decline to 17.01, the daily minimum. In the second half of Monday, the pair has gained momentum, rising after the Wall Street open to a daily high of 17.23.

Dollar remains firm in a week marked by US GDP data and core PCE

This week, the main drivers of the Dollar against the rest of the currencies will be the US preliminary GDP data for the first quarter of 2024, which is estimated to slow to 2.5% compared to 3.4% in the final three months of 2023, and the measure of underlying inflation of personal consumption expenditure PCE March, which is expected to moderate to 2.6% year-on-year from 2.8% in February.

The Dollar Index (DXY) has recovered ground this Monday after falling in the Asian session to 105.98, weakened by the climate of risk appetite that dominated the markets during the first part of the day. In recent hours, the greenback regained momentum, rising to 106.39, a new three-day high.

The dollar's momentum materialized when the Chicago Fed revealed that the national activity index rose to 0.15 in March from 0.09 in February, reaching its best record in 26 months. Additionally, CME Group's FedWatch tool updated its data on the chances of the Fed maintaining its restrictive stance for longer. The tool predicts 83% that interest rates will not vary in June. In July, this option achieves a 57.3% probability, while in September it is only 32.1%. At the September meeting, the possibility of a first rate cut rises to 46%.

Mexico will focus on the CPI for the first half of April and the unemployment rate for March

Mexico today published its global indicator of economic activity, showing an increase of 1.4% monthly in February and 2.6% year-on-year. On the other hand, it has announced the results of the National Survey of Construction Companies, which offers a good perspective of the behavior of the construction sector in the country. The indicator has revealed that the production value generated by construction companies decreased by 1.3% monthly in February, while it grew by 24.6% year-on-year, as published by the National Institute of Statistics and Geography (INEGI).

On Wednesday, the INEGI will reveal the inflation figures for the first half of April, while on Friday the unemployment rate for March will be published, both indicators being able to move the price of the Mexican Peso, although they will not influence as decisively as the data. Americans.

USD/MXN Price Levels

With the price of the Dollar against the Mexican Peso around 17.16 at the time of writing, gaining 0.37% daily, the short and medium-term trend for the USD/MXN remains bullish. In case of further strengthening of the USD, the first resistance to beat will be at 17.92, the five-month high reached on Friday, April 19. Higher up, the psychological zone of 18.00 will be an important barrier, which if broken could take the pair towards 18.49/18.50, where the highest level of the last twelve months recorded in October 2023 is.

If it breaks below 17.00, the immediate support, the cross could fall towards 16.54, where last week's low is located.