The price of the Dollar remains below 16.60 against the Mexican Peso

• The USD/MXN remains strongly pressured downwards below 16.00, although it registers gains compared to Wednesday.
• The Dollar reaches six-week highs at 104.72.
• The US GDP surprises with a growth of 3.4% in the fourth quarter compared to the expected 3.2%.

USD/MXN fell to its lowest level since 2015 at 16.51 on Wednesday. This Thursday, the pair tried to recover, but hit a barrier at 16.60. At the time of writing, the Dollar is trading against the Mexican Peso above 16.56, gaining 0.15% daily.

The dollar rises to six-week highs before the Easter holidays

The Dollar Index (DXY) has rebounded today to 104.72, its highest level in six weeks, although in the last few hours it has fallen back to 104.47, where it still gains 0.17% on the day.

The strength of the Dollar is supported by the risk-averse sentiment of the markets and the growing possibilities that the market gives to a delay in the first rate cut by the Fed. Rumors and statements by some members of the Federal Reserve They point out that the first drop could occur in July instead of June. For now, the CME Group's FedWatch tool only gives a 6.3% probability of a cut in May, while placing the chances of it occurring in June at 60.3%, compared to 63.8% yesterday.

This Thursday, the United States published several data favorable to an economic recovery. On the one hand, the annualized GDP has shown an increase of 3.4% in the fourth quarter of 2023, exceeding the 3.2% expected by experts. On the other hand, weekly jobless claims have fallen to 210,000 in the week of March 22 from 212,000, improving on the 215,000 expected.

Investors will now be watching the University of Michigan Consumer Sentiment Index for March, which is expected to remain at 76.5. Tomorrow the key data will be the inflation of underlying personal consumption expenditure (PCE).

Mexico lowered its unemployment rate in February

Mexico enjoys Holy Week holidays today and tomorrow. Yesterday, Wednesday, the National Institute of Geography and Statistics (INEGI) published its unemployment data for February, showing a drop to 2.5% compared to 2.9% in January, its lowest rate in eleven months. In addition, it improved the consensus forecasts, which placed unemployment at 2.8%.

The Mexican peso is enjoying greater strength these days derived from the words of the governor of Banxico, Victoria Rodríguez Ceja, who assured a few days ago that the central bank's rate cuts will be done cautiously, adding that it would not be advisable to rush now that the environment remains uncertain.

USD/MXN Price Levels

The price of the Dollar against the Mexican Peso remains immersed in a strong downward trend that, if extended, may find immediate support at 15.47, the minimum of December 2015. Below, the containment area is around 16.35, since The lows of September, October and November 2015 are gathered around it.

To the upside, a recovery above 16.77, this week's maximum tested on March 25, is necessary to advance towards the resistance located at 16.94, the ceiling of March 19. Above I would expect the strong psychological level of 17.00.