- Mexican peso continues to advance against the dollar.
- USD/MXN is close to the 2020 minimum located in the 18.50 area.
- Important US data will be released on Wednesday.
USD/MXN extended the downside and fell to 18.56, the lowest level since February 2020. The pair is trading around 18.60, with a firm downtrend and looking closely at the 18.50 support zone.
The dollar is resuming general declines on Wednesday, ahead of the release of important economic data. The drop in Treasury bond yields together with the rise in commodity prices is being a factor favoring the decline in the USD/MXN. The US Dollar Index (DXY) is down 0.35% and trades around 102.00, just above the multi-month low hit on Monday.
MXN remains firm on the podium
The appointment of Omar Mejía Castelazo to the Board of Governors of Banco de México is advancing in Congress and would arrive for the next monetary policy meeting. Said meeting will be on Thursday, February 9, one week after the decision of the Federal Reserve.
What the Fed does will be important for Banxico. Speculation about a slowdown in the rate of hikes by the US central bank has been a major factor driving the USD/MXN down. Added to this is the best mood in the equity markets.
On Wednesday, important data will be published in the US that may affect expectations about the Fed’s monetary policy. Among these, wholesale inflation and retail sales for December stand out. In addition, various central bank officials will be exposed in public.
Among the emerging currencies, The Mexican peso is the one with the best performance in the last five days and compared to a year ago. USD/MXN is trading almost 10% below where it was in January 2022, with the US-Mexico rate differential being a key factor.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
