- Mexican peso among the best performers on Monday.
- Risk aversion climate weighs on emerging market currencies.
- USD/MXN with short-term bullish bias, key resistance at 20.15/20.
The Mexican peso recovered against the dollar, and is in positive territory for the day, trading in the 20.00 area. USD/MXN rose hours ago to the 20.15 zone, the highest in almost a week, but then gave back almost all of the gains.
The increases had been driven by a rise in the dollar in the market, in a climate of risk aversion. The subsequent stabilization of the financial markets and a drop in the dollar favored the decline of the USD/MXN.
The Jackson Hole symposium left the guideline that the Federal Reserve will continue to raise interest rates and that the focus remains on curbing inflation. The same goes for the Bank of Mexico. Both central banks could raise rates again by 75 basis points.
The deterioration in the financial markets will continue to be a supportive factor for the USD/MXN. In any case, the Mexican peso remains somewhat firm and is among the strongest of the emerging markets.
Technically, if it were to overcome and assert itself above 20.15/20, the dollar would be positioned for more gains. In the opposite direction, the next support is 19.90, and a close below would point to more strength for the Mexican peso.
Technical levels
Source: Fx Street
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