- Dollar mixed ahead of US inflation data on Thursday.
- USD/MXN has the lowest close since 2020.
- North American leaders meet in Mexico.
USD/MXN fell as low as 19.04 on Wednesday, hitting the lowest since November and coming within a few steps of the lowest prices since early 2020. After approaching 19.00, the pair bounced towards 19.10. The trend continues in favor of the Mexican peso.
On Tuesday, the Mexican peso had the highest daily close since February 2020 against the dollar and maintains a positive tone. The Mexican currency needs to break below 19.00 to enable an extension of the rally. Such an area remains on the radar as USD/MXN shows limited rallies at the moment, failing to go beyond 19.15 on Wednesday. Above the next major resistance is seen at 19.30.
A scenario of continued good tone in the equity markets, together with a recovery in the price of raw materials and a low/stability in Treasury bond yields, would be positive for the Mexican peso. The main risks come from a drop in the stock markets, accompanied by a spike in US yields.
The three friends
Andres Manuel Lopez Obrador (president of Mexico), Joe Biden (US President) and Justin Trudeau (Prime Minister of Canada) met in Mexico City. At the summit, which is still underway, various agenda items were discussed, although no major developments that could have an impact on the markets are expected.
Regarding economic data, it was known in Mexico that industrial production was maintained in November, compared to the previous month and rose 3.2% compared to a year ago. The focus regarding reports is on what will be US inflation on Thursday. The market consensus is that the Consumer Price Index has remained unchanged in December, which would imply that the annual rate goes from 7.1% to 6.5%; while the core CPI is seen rising 0.3% in the month and the annual rate dropping from 6% to 5.7%.
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.
