- Mexican peso falls slightly after strong rise on Tuesday.
- USD / MXN decline did not change the bullish outlook, closing at 21.50 will point to more gains.
USD / MXN is rising modestly on Wednesday after Tuesday’s sharp correction. The price remained above the support of 10/21/15 and continues to be influenced by what is happening in the US bond market and on Wall Street.
The dollar on Tuesday had a major correction that caused the USD / MXN to fall from levels above 21.50 to 21.12. On Wednesday it came close to the ground and bounced. It is in consolidation mode in the short term with resistance at 21.30 / 35 and support above 21.10. If the latter is lost, the look will go to 9:00 p.m. While a close above 21.50, it would enable more gains.
Sentiment on Wall Street is still relevant for the Mexican peso. Today the futures of the main indices and the European markets are up slightly, making the rebound of the USD / MXN limited. In turn, the dollar index (DXY) rose Wednesday on the back of a rebound in Treasury yields. The 10-year benchmark bond yields 1.56%, far from the 1.52% floor of Tuesday.
Inflation data for February will be released in the US. In addition, the attention will be on the placement of debt. The House of Representatives expected to pass President Biden’s $ 1.9 trillion fiscal stimulus package.
In Mexico, the inflation data for February came out slightly above expectations, but without generating surprises. The annual rate went from 3.54% to 3.76%, after rising 0.63% in the month. The advance of inflation implies less probability of further cuts in the reference interest rate by Banco de México.
Technical levels
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