- The dollar remains firm throughout the market, while the Mexican peso becomes one of the worst.
- USD / MXN rises towards the August highs and is targeting 20.50.
The USD / MXN rises for the fourth day in a row and has accelerated the advance. The cross is trading at 20.43, the highest level in a month. It remains near the highs and about to test the August peak of 20.47. The next relevant resistance can be seen at the 20.50 area.
The combination of a rise in Treasury yields coupled with a cautious climate in global financial markets continues to propel the dollar. The DXY rises 0.30%, and broke above 94.00, reaching the highest level since November.
The Mexican peso is among the worst performing currencies on Wednesday, even despite the fact that a rate hike by the Bank of Mexico is expected on Thursday. Technical aspects and the strongest correlation with the US are among the factors that play against the Mexican peso.
The market consensus is for a rise of 25 basis points in the Mexican benchmark interest rate. There would be two votes against that decision. The upward cycle restarted after the advance of inflation and the rise in US Treasury bond rates.
The USD / MXN advance looks solid and to settle above 20.50 would be ready to go for more. The next level can be seen in the June highs at 20.75. The bullish tone is expected to remain intact while the USD / MXN remains above 20.15, below it would lose strength. Just a fall below 20.00 would point to a greater strength of the Mexican peso.
Technical levels
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