- The Mexican peso accelerates the upward trend against the dollar.
- USD/MXN could go towards 19.50/55.
- The dollar weakened against the emerging ones due to a rise in stock markets and stability in Treasury bond yields.
USD/MXN is falling significantly and is trading at 19.61, the lowest level since June 2021 and one step away from making the lowest since March 2020. The retracement is behind the weak dollar and technical factors.
Emerging currencies are advancing against the dollar in general, even at a firmer pace than the Mexican peso. Turkish lira and Russian ruble are the exceptions and fall significantly.
The break of 19.70 reaffirmed the bearish bias in USD/MXN. If it asserts itself at current levels in addition to having the lowest weekly close since March 2020, it would leave the pair targeting the next strong support that can be seen at 19.50/55, a level that would be expected to favor a bullish bounce. If you continue below, 19.30 appears.
The minutes of the last meeting of the Bank of Mexico they were seen as “hawkish” by showing the possibility of applying a stronger adjustment in case inflation cannot be controlled. This helped the Mexican peso, but not enough to stand out in the universe of emerging market currencies.
At the close of the week, shares rise again on Wall Street, extending weekly gains and snapping a seven-week losing streak. If the recovery continues, the Mexican peso could be favored, especially if there is no reaction in Treasury bond yields.
Technical levels
Source: Fx Street
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