- Mexican peso loses ground for the fourth consecutive day against the dollar.
- Rise in equity markets does not stop the USD / MXN advance.
USD / MXN is rising for the fourth day in a row and reached 20.50, the highest level since October 15. The cross then had a pullback finding support at 20.40.
The short-term tone is still bullish in USD / MXN and to enable more raises, it should break and hold above 20.50. The next resistance then is at 20.65. In the opposite direction, now 20.30 is where the initial support is, the break of which would relieve the pressure to the upside.
For October anyway, the USD / MXN is on its way to cut with two months in a row on the rise. The close away from the lows may suggest that the dominant background tone continues to be due to more advances in the dollar. Just a monthly close below 19.80 would enable more lows; in the opposite direction, above 21.15 would be a medium-term bullish signal.
Data and Fed behind the dollar
The dollar’s advance on Friday is driven by a rise in Treasury yields and a general strength of the greenback, ahead of next week’s meeting of the Federal Reserve. This continues to be a key driver for the USD / MXN. In any case, the Mexican peso has been one of the most affected currencies these days and it is one of the ones that falls the most among the most traded.
US economic data has shown no surprise and does not point to a change from what the Fed is expected to announce next week. This may remain a key support for the dollar in the coming sessions.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.