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USD/MXN moves again around 17.15, focus on US GDP data.

  • The USD/MXN operates in a narrow range this Wednesday between 17.11 and 17.15.
  • Mixed comments from Fed officials weighed on the US dollar.
  • Banxico Deputy Governor Jonathan Heath indicated one or two rate cuts in 2024.

The USD/MXN halted its three-day winning streak due to the weakening of the US Dollar following mixed comments from Federal Reserve members on Tuesday. Furthermore, mixed data from the United States failed to heal the USD. Despite this, the pair operates on the European morning on Wednesday around 17.15, gaining 0.16% daily

He Fed Governor Christopher Wallersuggested a more accommodative approach consisting of Do not insist on maintaining high interest rateswhile Fed Governor Michelle Bowman mentioned the likelihood that the US Fed would keep the official interest rate at a level higher than pre-pandemic levels.

In September, the US house price index grew by 0.6%, exceeding expected levels of 0.4%. Simultaneously, the CB consumer confidence index experienced a rebound, standing at 102.0 points. In contrast, the Richmond Fed Manufacturing Index reported an unexpected negative reading of -5, deviating from the expected positive figure of +1.

On the other hand, the Mexican Peso (MXN) lost ground earlier this week against the US Dollar, as Jonathan Heath, deputy governor of the Bank of Mexico (Banxico), noted that underlying prices must continue to fall. He also indicated that there could be one or two rate cuts next yearemphasizing that any adjustments would be made “very gradually” and “very cautiously.”

On the other hand, recent Banxico minutes highlight the importance of maintaining higher interest rates for a prolonged period to achieve the target inflation rate objective. This stance, combined with the positive inflation data released earlier, could have put downward pressure on USD/MXN. This Thursday the unemployment rate for October in Mexico will be published.

Frequently Asked Questions about the Mexican Peso

What is MXN?

The Mexican Peso is the legal tender of Mexico. The MXN is the most traded currency in Latin America and the third most traded on the American continent. The Mexican Peso is the first currency in the world to use the $ sign, prior to the later use of the Dollar. The Mexican Peso or MXN is divided into 100 cents.

What is Banxico and how does it influence the MXN?

Banxico is the Bank of Mexico, the country’s central bank. Created in 1925, it provides the national currency, the MXN, and its priority objective is to preserve its value over time. In addition, the Bank of Mexico manages the country’s international reserves, acts as a lender of last resort to the banks and advises the government economically and financially. Banxico uses the tools and techniques of monetary policy to meet its objective.

How does inflation impact the MXN?

When inflation is high, the value of the Mexican Peso (MXN) tends to decrease. This implies an increase in the cost of living for Mexicans that affects their ability to invest and save. At a general level, inflation affects the Mexican economy because Mexico imports a significant amount of final consumption products, such as gas, fuel, food, clothing, etc., and a large amount of production inputs. On the other hand, the higher the inflation and debt, the less attractive the country is for investors.

How does the Dollar influence the Mexican Peso (MXN)?

The exchange rate between the USD and the MXN affects imports and exports between the United States and Mexico, and may affect demand and trade flows. The price of the Dollar against the Mexican Peso is affected by factors such as monetary policy, interest rates, the consumer price index, economic growth and some geopolitical decisions.

How does the Fed’s monetary policy affect Mexico?

The exchange rate between the USD and the MXN affects imports and exports between the United States and Mexico, and may affect demand and trade flows. The price of the Dollar against the Mexican Peso is affected by factors such as monetary policy, interest rates, the consumer price index, economic growth and some geopolitical decisions.

USD/MXN Technical Levels

USD/MXN

Panorama
Today’s Latest Price 17.1515
Today’s Daily Change 0.0199
Today’s Daily Change % 0.12
Today’s Daily Opening 17.1316
Trends
20 Daily SMA 17.3843
SMA of 50 Daily 17.6962
SMA of 100 Daily 17.3568
SMA of 200 Daily 17.5947
Levels
Previous Daily High 17.2148
Previous Daily Low 17.1049
Previous Weekly High 17.2695
Previous Weekly Low 17.0658
Previous Monthly High 18.4934
Previous Monthly Low 17.3786
Daily Fibonacci 38.2% 17.1469
Daily Fibonacci 61.8% 17.1728
Daily Pivot Point S1 17,086
Daily Pivot Point S2 17.0405
Daily Pivot Point S3 16.9761
Daily Pivot Point R1 17.1959
Daily Pivot Point R2 17.2603
Daily Pivot Point R3 17.3059

Source: Fx Street

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