- Emerging market currencies rise on Wednesday, as markets rebound.
- Mexican peso gets extra boost from technical factors.
USD/MXN broke below 20.23 and dropped to 20.15, the lowest intraday level since late October last year. The cross remains below 20.25, with the bearish tone intact.
The break and confirmation of the USD/MXN below 20.25 levels leaves the pair ready for a bearish extension, with supports at 20.15 and 20.05. The 20.00/05 zone is key and a drop below will point to further declines.
Should there be a bounce from the current level back over 20.35, it could be a sign of a bottom in the USD/MXN, favoring a rebound/consolidation ahead.
Despite being at highs in months and the continuation of upward trends, the Mexican peso is not necessarily one of the best performers among emerging markets. This reflects that part of the movement is being driven by the weakness of the dollar.
The greenback on Wednesday is affected by a rebound in equity markets. The climate remains cautious in the face of uncertainty over the conflict in Ukraine. At the same time, this risk factor is overshadowed by the rise in commodity prices, which favor emerging markets.
Thursday in Mexico The mid-February inflation report will be published, which will be key for the next Banxico meeting.
Technical levels
Source: Fx Street
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