- Dollar rises more than 1% in Mexico before the collapse of the stock markets in the world.
- USD / MXN has the most important daily advance in a month, at highs in weeks.
The USD / MXN is advancing for the third day in a row, but the peculiarity is that the pace of the rise has accelerated significantly in the face of a rally of the dollar against most currencies. The cross climbed from levels below 21.00 to 21.36, the highest level since October 15.
From the peak, the USD / MXN retreated slightly and stabilized, for the time being, around 21.25. The bullish tone remains firm with the retracement from the highs unable to break 21.20.
In the currency market, the one that rises the most on Wednesday is the yen. The safe haven currency was favored by a sharp drop in stock markets throughout the world. Fears about the impact of new restrictions on activities impact the mood of the markets. On Wall Street, the Dow Jones lost 2.80% and the Nasdaq lost 2.85%.
Among the emerging ones, Although the Mexican peso is one of the worst going on Wednesday, the one that falls the most is the Russian ruble. The Brazilian real is trading at the lowest level since May with USD / BRL over 5.70, reaffirming the uptrend.
The dollar against the Turkish pound and the Brazilian real, for example, show a reaffirmed uptrend. Can the Mexican peso continue to decouple from that dominant trend? If these were to deepen, it would be expected that the USD / MXN gains momentum.
Another risk for the Mexican peso, in addition to risk aversion, is the proximity of the US presidential elections (although less than four years ago) and the domestic factors in Mexico, with inflation that does not recede and economic activity shows signs of slowing down.
Credits: Forex Street
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