- The dollar falls after US employment data.
- Mixed figures on the evolution of the labor market in August.
- USD/MXN plummets after data towards 20.00.
The USD/MXN fell sharply from 20.13 to 20.01, after the release of the US employment report for August, which pushed the greenback down in the market. The pair hit three-day lows and is in a bearish tone, testing the 20.00 area.
Emerging market currencies were helped by the impact of US data, which showed an increase in non-farm payrolls by 315,000 vs. 300,000 expected; the unemployment rate unexpectedly rose from 3.5% to 3.7%.
The treasury bond yields Stocks fell after the report as Wall Street stocks rose, pushing down the dollar and helping emerging market stocks.
Despite the slowdown in the pace of job creation, a strong monetary adjustment in the interest rate is still expected by the Federal Reserve.
In Mexico next week a key figure will be known on Thursday 8, with the inflation figure for August. The Consumer Price Index is above 8% (annual), which continues to pressure the Bank of Mexico to make more interest rate hikes.
testing 20.00
The USD/MXN is testing levels below 20.00, and should it settle below 19.97, it would open the doors for a pullback to 19.90. The next support is the 19.80 area, where the August lows are.
To the upside, the first resistance now looms at 20.15. The key level is the strong resistance at 20.25. A confirmed break of 20.25 would leave USD/MXN poised for an extension to the upside.
Technical levels
Source: Fx Street
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