- Mexican peso continues to lead the weekly performance podium among the most traded.
- Advance of the dollar in the G10 group, does not extend to emerging markets.
- This week decision of the Fed and Banxico.
USD / MXN remains negative and looking at the support at 20.80 / 85, which contained the lows last week. If it remains below 21.05, we cannot rule out further declines in the short term. A rally over 21.15 could end the current bearish run.
From the Fed to Banxico
The week begins with the focus on what the meeting of the Federal Reserve that on Wednesday he will announce his decision. The buying program is expected to be cut further and all eyes will be on the forecast and signals regarding the interest rate next year. Economic data and high inflation in the US have led to further monetary tightening expected sooner than previously anticipated, which had been supporting the dollar.
But for two weeks that the USD / MXN has been falling. First it was a correction after the jump to levels above 22.00 and last week it already had more significance when it lost 21.00. The floor touched it on Friday at 20.84. On Monday the cross rose to 20.95 before turning back towards the lows.
In the short term, the Mexican peso continues to be among the currencies that have risen the most in the market. The crisis with the Turkish lira, which worsened on Monday, has not affected the rest of the emerging countries these days.
In addition to the Fed, Banco de México will also announce its decision this monetary policy week. With inflation also on the rise, another 25 basis point increase in the benchmark interest rate is expected from 25 basis points to 5.25%.