USD / MXN accelerates the rise and approaches 20.00

• Emerging currencies fall against the dollar on a day of global stock market decline.
• USDMXN rises for the second day in a row, something that has not happened since the beginning of December.

USD / MXN is up for the second day in a row on Friday, driven by risk aversion. The generalized fall of the stock markets increased the demand for the dollar, which is rising on almost all fronts. The price of the cross climbed to 19.95 and remains in the zone of the highs with the bullish tone intact.

The Wall Street futures point to a negative open, with falls in the main indices of around 0.70%. With optimism for the already discounted stimulus package, added to a correction from record highs, and new restrictions due to the coronavirus in the world, the market mood has changed.

Only yesterday the USD / MXN had traded at the lowest intraday level since March last year at 19.54, before starting the current rally. The pair stopped, for the time being, below the 50-day moving average of 19.96. A close above would point to an extension of the raises, to test the 20.25 / 30 band. In the opposite direction, a pullback below 19.80 would return the initiative to the Mexican peso.

In Mexico, it was known that mid-month inflation rose more than expected, increasing 0.51%. “The small rise in inflation in Mexico to 3.3% per year in the first half of January was largely driven by higher fuel prices and is unlikely to be a concern for the central bank. We continue to expect a final drop in the interest rate of 25 basis points (to 4.00%) at the next Banxico meeting in February ”, affirmed the analysts at Capital Economicst.

Technical levels