USD/MXN Price: The Dollar rises to 17.22 against the Mexican Peso after the Fed announcement and Jerome Powell's statement

• USD/MXN rebounds with the Fed announcement and rises to 17.22 after Jerome Powell's statement.
• The US Federal Reserve maintains interest rates at 5.5% for the fourth consecutive meeting.
• The Fed chair notes that a rate hike in March is unlikely.

USD/MXN has bounced on the Fed announcement, initially rising to 17.22 and then falling to 17.11. Following the statement by the entity's president, Jerome Powell, the pair has returned to 17.22, the daily high.

The Dollar gains momentum after Jerome Powell's statement

The United States Federal Reserve (Fed) has decided not to vary its interest rates at the first monetary policy meeting of 2024 held today, January 31. Rates remain at 5.5% for the fourth consecutive meeting, as expected, after they were last raised last July.

Jerome Powell, president of the Fed, has indicated in his appearance that he sees a rate cut in March as very unlikely. The FedWatch tool has immediately lowered its odds of a first downgrade in March to 36.4%, its lowest level in recent weeks.

The Dollar Index (DXY) fell at the start of Powell's statement towards around 103.00, but subsequently shot higher, rising to 103.74, its highest level in two days. The delay in the rate cut favors the greenback. At the time of writing, the DXY is trading above 103.64, gaining 0.23% by the end of the day.

Prior to the Fed's announcement, US ADP employment data and the Chicago PMI were released, both disappointing market forecasts. The United States generated 107,000 private jobs in January, below the 145,000 expected. Additionally, the December figure was revised downwards, standing at 158,000 from 164,000. The Chicago PMI, for its part, contracted to 46 points in January from 47.2 in December, disappointing the 48 expected by consensus.

Investors will be watching market sentiment in the coming hours. Tomorrow, Thursday, the focus will turn to the US data on weekly unemployment claims and the ISM manufacturing for January, which is expected to drop to 47 points from 47.4 in December.

USD/MXN Price Levels

The price of the Dollar against the Mexican Peso ends the day on Wednesday around 17.20, gaining 0.28% daily. The first resistance in case the USD continues to strengthen wait at 17.26 (weekly high recorded on January 29). Above there is a strong barrier at 17.38, the monthly maximum reached on January 17 and 23. If it overcomes this region, the cross will find important resistance at 17.56, the highest level in December.

To the downside, a break of 17.05, last week's low, is necessary for a bearish turn to gain strength. In case of breaking it, it will find the next support in the psychological region of 17.00. Below this level, the pair may fall towards 16.78, where it awaits the five-month low recorded on January 8.