- The Mexican peso remains under pressure against the US dollar
- USD/MXN tests levels above 19.00, 2.5% above Wednesday’s low.
The USD/MXN It is trading slightly above 19.00, looking for the weekly high it hit on Thursday at 19.05. The pair resumed the bullish path after a brief retracement to 18.89. On Wednesday, it traded at 18.56, the lowest level since February 2020.
The Mexican peso has not been able to benefit from the rebound in commodity prices. At the same time, the US dollar remains firm supported by economic data and rising US yields.
New data, the old debate and a new member for Banxico
Economic data released in the US on Thursday beat expectations (initial jobless claims and Philadelphia Fed) and supported market sentiment. Still, Wall Street indices are trading lower. Emerging market currencies remain under pressure, extending correction from multi-day highs. The rebound in commodity prices on Thursday is being offset by rising US yields.
The US reached the debt limit and the Treasury began applying special measures to avoid a default. The debate on the increase in the debt ceiling in Congress is complex, since the Republicans have the House of Representatives and the Democrats the Senate.
In Mexico, Congress voted to confirm Omar Mejía, the government’s proposed candidate for Banco de México for an eight-year term. Relatively unknown to market participants prior to his appointment, Mejía’s first vote on the board will be at the next meeting on February 9. He supported the current interest rate hike cycle and promised transparency and independence.
USD/MXN Technical Outlook
USD/MXN is staging a solid rebound. Technical indicators turn higher on the daily chart. The price is still below the 20-day Simple Moving Average to watch at 19.17. If the pair manages to break and hold above 19.00/05. The next strong barrier is at 19.30.
A pullback to 18.80 would be considered a normal correction to the recent rally. If it falls below, the Mexican peso would regain some strength.
USD/MXN daily chart
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
