- Positive day for the dollar against emerging market and commodity-linked currencies.
- USD / MXN tests the 20.30 zone, confirmation above would enable more raises.
The USD / MXN continues its bullish tone and has just risen to 20.32, reaching the highest level in four weeks. The price remains near the highs, underpinned by a stronger dollar throughout the market.
A firm break out of the 20.30 zone would leave the dollar on track for further gains with the next strong USD / MXN resistance being around 20.50. In case of losing 20.15, the upward pressure would ease, while already below 20.00, the Mexican peso would recover momentum.
Dollar advance
The The strengthening of the dollar after Monday’s decline, coupled with a fall in stocks, is weakening demand for emerging market currencies. The expectation of superior economic growth in the US may also be playing an important role.
Treasury yields are retreating on Tuesday, but this is not holding back the dollar. The 10-year rate is 1.59%. While the index of the BARELY (volatility) jumped in the last two hours and Wall Street futures point to an open with falls for stocks around 0.55%.
In Mexico, bond interest rates are also rising, which in this case does not reflect good news and can be a problem. On the other hand, it was known that in the first quarter of 2021, the income of remittances to Mexico it was up 13% compared to the same period of the previous year, reaching a record for said quarter.
With regard to economic data ahead, in USA the focus will be employment with the private sector ADP report on Wednesday, the jobless claims report on Thursday and the official April report on Friday, which includes non-farm payrolls and the unemployment rate. On Mexico, Friday will be the turn of important inflation data.
Technical levels
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