- The Mexican peso among the weakest currencies on Monday.
- Turkish lira crash affects markets.
The USD / MXN started the week with a large gap to the upside at 20.83, the highest level since March 12. After a setback, that level was tested again two hours ago, but after failing to break, the cross corrected down again. It is trading around 20.65, a rise of 0.75% compared to Friday’s close.
La sThe dollar’s rise against the Mexican peso was driven by negative weather for emerging market assets after the Turkish lira plunged. Turkish President Recep Tayyip Erdogan ousted the head of the central bank over the weekend. The monetary authority had raised the benchmark rate by 200 basis points on Thursday. The new boss is critical of high rates and it is speculated that Erdogan’s changes represent the end of a monetary tightening policy.
The collapse of more than 10% of the lira impacted other currencies. For now, the Mexican peso is one of the most affected, although it remains for others to start operating, such as the Brazilian real. The contagion for now looks limited. Operators will closely follow the events.
Technically the USD / MXN maintains a bullish tone, lAfter having managed to hold above 20.25 last week, where there is a significant bullish line. If it loses it, a strengthening of the Mexican peso could be expected. In the opposite direction, as long as it remains above 20.55, the bullish tone will remain strong. Resistance to break is at 20.80 / 85 and then the 21.00 level will follow.
Technical levels
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