- USD/MXN falls to three-week lows at 17.80.
- The price of the Dollar loses all the ground gained in the last hour.
- The Fed keeps rates unchanged at 5.5% but Jerome Powell leaves the door open for further rate hikes.
The USD/MXN has seen a sharp decline in recent hours, sliding throughout Wednesday from a daily high of 18.08 to new three-week lows of 17.80 following the Fed’s announcement.
The price of the Dollar falls after Jerome Powell’s statements
The Dollar Index (DXY) initially rebounded to a four-week high of 17.11, with the Federal Reserve announcing to leave its interest rates unchanged at 5.5% for the second consecutive meeting. However, the words of Jerome Powell, president of the entity, caused a turn in the greenback, which subsequently fell to 106.65, approaching the daily minimum of 106.61.
Powell has indicated in his statements that the Fed is not thinking or talking about rate cuts, and has opened the door to the possibility of new increases if necessary. The president has acknowledged that the effects of the tightening have not yet been fully felt, and that inflation remains high, still far from approaching the 2% objective.
Previously, the ADP private employment report for October revealed that the United States created 113,000 jobs compared to the expected 150,000. The ISM manufacturing PMI data also disappointed, showing a drop to 46.7 points from 49 in September, a figure that was expected to hold today.
With the USD/MXN trading at the time of writing above 17.80, losing 1.32% daily, the next major support appears at 17.75, minimum of October 12. Further down, a support zone awaits around 17.37/17.34, where the October minimum recorded on day 2 and the bottom of September 29 is.
To the upside, the first resistance if it continues to rise is at 18.14, the maximum of October 30. Higher up it expects 18.42, the top of October 26, and the zone between 18.46/18.49, which contains the October highs recorded on October 20 and 6, respectively.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.