- Mexican peso in consolidation mode, with expectations on Wall Street and Banxico.
- USD / MXN between 20.10 and 20.20, with an upward bias.
The USD / MXN rose hours ago to 20.21, reaching the highest level in a week, pero quickly dipped quickly below 20.20. The crossing remains in the consolidation range between 20.10 and 20.20.
The Mexican peso weakened on Thursday due to a strong rally of the dollar and the fall of the stock markets throughout the world. Today equity markets are recovering ground, helping the MXN.
Thursday’s US inflation data again showed higher than expected increases but this time without having an impact on Wednesday’s. Treasury yields are retreating for now, with the 10-year benchmark at 1.67%, after hitting 1.70%, pushing out the dollar.
On Mexico the attention shifts to the central bank that today will announce the monetary policy decision. No changes are expected in the benchmark interest rate, which would remain at 4%. The tone and guidelines of the central bank will be important, although if there are no surprises, the impact could be very limited. The authorities are complicated by a rise in inflation, in a context where the economy is growing well below potential.
Technical levels
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