- The dollar loses strength after Japanese intervention.
- Mexican peso among the best performing currencies on Thursday and for the week.
- USD/MXN with a negative outlook, targeting 19.80.
The USD/MXN is falling on Thursday and operates in the area of lows in a week and a half despite the rise in Fed rates and the decline in the stock markets. The pair fell to 19.83, the lowest level since September 13.
The Mexican peso faces the firm dollar
The Federal Reserve raised, as expected, the interest rate by 75 basis points. The statement had very few changes from the previous one. It is estimated that the rate will continue to rise.
What was done yesterday by the Fed guarantees that Banxico it will raise interest rates again when the Governing Board meets next week. The rise would be 75 basis points, to maintain the differential with respect to the Fed.
The decision and the message of the Fed had a positive impact on the dollar in the sum. The DXY marked maximum in years although after learning that Japanese authorities intervened in the foreign exchange market, a correction began. In this context, and despite the fact that the stock markets are falling in the world, the Mexican peso remained firm.
USD/MXN is in a bearish bias and is targeting the 19.80 support. Should it firm below, the downside could extend towards the next key level of 19.70/72, which is the last strong protection before 19.50. In the opposite direction, resistance is building at 20.10. Above it follows the 20.15 area. A daily close above 20.25 would enable more gains in the short term.
Technical levels
Source: Fx Street
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