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The price of the Dollar rises to two-day highs against the Mexican Peso in the Fed week

  • USD/MXN regains ground and reaches two-day highs at 17.14.
  • The price of the Dollar rises to 105.35 and remains near the six-month highs tested last week.
  • The Fed’s monetary policy decision will focus all the weekly attention.

USD/MXN started the week with a drop to two-and-a-half-week lows of 17.03 during the European open. Subsequently, the pair has recovered ground favored by the momentum of the Dollar until reaching two-day highs at 17.14 in the preview of the American session.

The Dollar continues to prevail in the Fed week

He Dollar Index (DXY) continues to hold firm after last Wednesday (September 14), the price rose to a six-month high of 105.43. Today, the Dollar has hit a daily high of 105.35, closely following the aforementioned half-year highs.

The cautious tone of the market favors the Dollar in the Fed week. The United States Federal Reserve holds its monetary policy meeting between Tuesday and Wednesday, announcing its decision on rates on the 20th at 18:00 GMT. Two days after the announcement, the FedWatch tool gives 99% chance the Fed will keep rates unchanged. For the November meeting, the chances of a rate increase are 30.7% while for December they rise to 36.8%.

Without relevant data in Mexico until Thursday and Friday, when retail sales for July and inflation for the first half of September are published, on Friday it was known that 15% of United States imports in the year-on-year reading for July were from Mexico, surpassing 14.6% from China. This data indicates that Mexico is the emerging country that may be benefiting the most from the trade crisis between the US and the Asian giant.

USD/MXN Price Levels

The USD/MXN is trading at the time of writing at 17.12, gaining 0.30% daily. An overcoming of the resistance 17.20high of September 14, will point towards 17.40, former upward barrier. Above, the torque can shoot up to 17.70ceiling of September 7 and the last three and a half months.

On the downside, the Initial support awaits in the psychological zone of $17.00. A break below this level can lead to a strong downward movement towards 16.62, the almost eight-year low recorded on July 28.

Source: Fx Street

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