USD / MXN bounces to 20.45 zone after sharp drop on Friday

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  • The Mexican peso maintains a favorable tone against the dollar but the rally loses strength.
  • USD / MXN with support at 20.30, which limits the downs.
  • Ahead of the week: Inflation data and Banxico decision.

The USD / MXN tumbled on Friday from 20.60 to 20.31, the lowest since October 28. On Monday it is rebounding moderately and reached 20.42, which coincides with the 20-day moving average. The short-term tone is still bearish, but the cross offers support at the 20.30 area.

The Mexican peso finished last week as one of the best performers thanks to the strong advance on Friday. The dollar, for its part, did so with mixed results, in a contest between better-than-expected data from the US and optimism in stocks, with a reversal in Treasury yields.

Week moved for USD / MXN

After a slow start to the week, with a light economic calendar on Monday, from Tuesday there will be relevant data and events for the USD / MXN. The most relevant from Mexico will arrive on Thursday with the meeting of the central bank. An interest rate hike of 25 basis points to 5% is expected. Previously, on Tuesday the inflation data for October will be known, where the annual rate would exceed 6%.

In the US, inflation data will be the most relevant. On Tuesday it will be the turn of the producer price index and on Wednesday the consumer price index. These figures are expected to have an impact on the Federal Reserve’s monetary policy expectations.

Anyway, the tone around USD / MXN it is to be expected that it remains determined primarily by what happens to risk appetite in equity markets and to Treasury yields.

Technical levels


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