- Mexican peso cuts negative streak against the dollar.
- US inflation data pushed the dollar lower.
The USD / MXN is falling on Wednesday due to a general weakening of the dollar in the market, after the inflation figures of July from the US The price of the cross went from 20.06 to 19.95, reaching the lowest level since Friday.
TAfter the start of the American session, the USD / MXN bounced towards 20.00, but remained below. The dollar had managed to partially stabilize after the data drop. In this way, the cross is correcting downward after reaching 20.16 on Tuesday, the highest level in two and a half weeks.
The deterioration of the dollar came from a decline in US Treasury yields and a rise in equity markets. The latter also served as support for emerging market currencies, including the Mexican peso.
Now eyes on Banxico
Thursday the Bank of Mexico announce its monetary policy decision. The expectation is for another rise of 25 basis points. The start of the upward cycle has been a supporting factor for the Mexican peso, but generated to put a brake on the advance in inflation.
Banxico’s next steps, beyond Thursday, will depend on the inflation outlook. A moderation in the rise in prices, at the same time accompanied by a stabilization or appreciation of the exchange rate, could favor a pause in the upward cycle of interest rates.
Technical levels
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