- Mexican peso accelerates the rise against the dollar at the beginning of the week.
- Rise in global stocks continues to support the Mexican peso.
- USD/MXN could consolidate back above 19.50.
The USD/MXN continues the downward trend that began on Friday after the break of 19.70. On Monday it even lost 19.50 and fell to 19.41, level not visited since early March 2020.
In the last hour the Mexican peso has trimmed gains, with USD/MXN approaching 19.50 again. The prevailing tone remains bearish, but after several hours of declines, some respite for the dollar may be possible.
The declines in the USD/MXN continue to be driven by the weakness of the dollar and the rise in stock markets throughout the world. Added to this is the rise in interest rates in emerging countries, including Mexico. Although the Fed is expected to raise the interest rate by 50 basis points at the next meeting, the same is expected from Banxicomaintaining the differential and attractive for operations in pesos.
Will Peso be able to stay below 19.50?
USD/MXN is trading below 19.50. If it manages to assert itself below and especially if it does so at levels below 19.45, a downward extension could be expected, with a possible target at 19.30.
In the opposite direction, if it returns above 19.50, some type of consolidation could be expected for a few sessions in a range between 19.50 and 19.70, without putting the prevailing downtrend at risk.
Technical levels
Source: Fx Street
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