The price of the Dollar approaches 17.45 against the Mexican Peso in the week of the US CPI, the Fed and Banxico

  • USD/MXN rises to daily highs at 17.44.
  • The price of the Dollar maintains the ground gained after the good NFP data on Friday.
  • The pair’s traders will be very attentive this week to US inflation and the interest rate decisions of the Fed and Banxico.

The USD/MXN has started the week trading around 17.34 but in the European session it has taken flight until reaching a daily high at 17.44. At the opening of Wall Street, the pair is trading above 17.43, gaining 0.41% daily.

The price of the Dollar remains above 104.00 after the NFP

He Dollar Index (DXY) regained ground on Friday after US Nonfarm Payrolls showed 199,000 jobs were created in November, 19,000 above the 180,000 expected. Additionally, the unemployment rate fell to 3.7% from the previous and projected 3.9%. These figures have increased the chances that the US Federal Reserve (Fed) will delay its interest rate cut in 2024, even speculating with some extra rate hike, which gives strength to the Dollar. The greenback rose to 104.27 on Friday, its highest level in three and a half weeks, and remains close to this region today, Monday, after reaching a daily high of 104.20.

USD/MXN traders will be very attentive this week to different data and events that can generate high volatility in the pair. First of all, this Tuesday the United States Consumer Price Index (CPI) for the month of November is published. Headline inflation is expected to moderate to 3.1% year-on-year reading from 3.2% in October, while core CPI is expected to remain unchanged at 4%. Wednesday will be the turn of the Federal Reserve, which will announce its last interest rate decision of the year, widely expected to leave rates at 5.5%. The FedWatch tool gives a 98.4% chance that the entity will leave rates unchanged at the December meeting, so the focus will be on the Fed’s projections. Banxico’s decision will arrive on Thursday. Market forecasts estimate that Mexico’s central bank will leave its rates unchanged at 11.25% for the sixth consecutive meeting.

USD/MXN Price Levels

The USD/MXN continues to show a slightly bullish trend on 4-hour charts, although remains bearish on broader time charts.

In case the price of the Dollar continues to rise against the Mexican Peso, it will find a strong barrier in the region between 17.50 and 17.56, where a psychological level and several highs recorded last week are located. Above this zone, USD/MXN will target the round 18.00 level.

On the downside, initial support appears at 17.30, the minimum of December 8, followed by 17.16, the December floor recorded on the 1st of this month. A break of this level would point towards 17.03, the lowest level reached by the pair in the month of November (day 27).

Source: Fx Street

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