- Banxico slows down the cycle of interest rate declines.
- Mexican peso among the best performing currencies on Friday.
USD / MXN is falling on Friday, after the decision of the Bank of Mexico on Thursday. The price has just touched 20.53, the lowest level in three days and remains close to that level and the lows of this week.
The Mexican peso is among the best performing currencies on Friday. This after the Bank of Mexico announced on Thursday that it kept the benchmark interest rate unchanged at 4%. There were some who speculated with a last cut.
Banxico’s decision was unanimous and strengthened the Mexican peso. It is now estimated that there will be no change in the interest rate for a time, unless current conditions change considerably.
Among the emerging markets on Friday, the Mexican peso is one of those that rises the most, supported by what Banxico decided. The rest show mixed results. The dollar has strengthened in the face of a rise in Treasury yields, but at the same time the rise in stocks on Wall Street plays in favor of the demand for riskier assets.
Short-term technical outlook
From a technical point of view, USD / MXN is biased to the downside on Friday and is testing the 20.50 / 55 support. This level contains the lows since Monday and if broken it would enable a bearish extension towards 20.25 / 30 where the next strong support is.
Just an advance over 20.80 could bring strength to a bullish outlook and will favor a test to the 21.00 area, which has become resistance to break. In any case, to reach this level in the next few hours, a great fluctuation in the financial markets will be necessary.
Levels to consider
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