- Emerging market currencies with mixed results on Monday.
- The dollar gains momentum before rising Treasury bond yields.
The USD/MXN is trading around 20.63, showing little change at the start of the week. The advance of the Mexican peso against the dollar is modest. Traders waiting for clearer signals.
After rising to 20.79 on Friday, the highest in almost a week, USD/MXN pulled back and avoided closing above 20.70, which remains a key technical level.. A higher daily close would point to more upside, exposing next resistance at 20.85.
On the downside, the key support that appears is the area around 20.52, where the 20-day moving average is. A fall below, confirmed with a close, will leave the doors open to more rises for the Mexican peso. The next supports are at 20.35 and then 20.30 (200 day moving average).
The key event for Mexico will be the central bank meeting on Thursday. A rise of 50 basis points to 6% in the reference rate is expected. Before said event, January inflation data will be published on Wednesday, which would show a slowdown from 7.36% to 7.01%, the minimum since October, but still well above the target for Banxico 2/4%.
In the US, the economic calendar is light this week, with the main dish on Thursday with the retail inflation figure for January. Expectations continue to point to a hike in the Federal Reserve interest rate for March, with the possibility of even a 50 basis point hike.
Technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
