- The dollar rises sharply after US inflation data.
- Inflation does not subside as expected, maintaining expectations of an aggressive Fed.
- USD/MXN remains in range, between 19.95 and below 20.20.
The USD/MXN jumped from 19.96 to 20.16, after the September inflation figures for the United States were released. Despite rising to a one-week high, the pair remains in the range of recent days, albeit with upside risks given the strength of the dollar.
The US Consumer Price Index rose 0.2% in September, above the 0.1% expected; the annual rate fell only to 8.2%. The core index climbed from twelve months ago to 6.6%, the highest in decades. These figures pushed up the dollar in the market, and pulled down the price of shares, as well as metals.
Emerging market currencies also fell sharply against the dollar following the inflation figures. The Mexican peso is far from the worst performer.
The USD/MXN remains in a lateral range operating with support at 19.95 and unable to break above 20.20. The sideways bias at the moment has the risks of a break to the upside, with the dollar strong in the market and risk aversion. But just a confirmation above 20.20, would leave the dollar positioned for a bullish extension.
Technical levels
Source: Fx Street
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