- Mexican peso best performance before Biden’s possibility of victory.
- USD / MXN remains without clear direction, rejected below 21.00.
The USD / MXN fell back in the last few hours but remained above 21.00. The rebound of stocks on Wall Street and the weakness of the dollar in the market before the change of scenery in the counting of the US presidential elections drove the cross down.
The price in the Asian session came close to 22.00, at a time when the outlook favored President Trump. As the hours went by and especially in the last minutes, Joe Biden’s chances increased significantly after reversing the trend in Michigan and Wisconsin.
This change in scenario, where Biden now looks more likely to win, favored emerging currencies. USD / MXN fell to 20.90 but quickly returned above 21.00. It is trading at 21.20, with a slight rise for the day. In general, the prices of currencies do not register large variations compared to yesterday’s closings.
US economic data released on Wednesday had no impact on the market, which remains focused on what happens with the presidential election.
In the absence of a clear winner and if a legal battle arises, downward pressures would be expected for the MXN, and emerging assets in general. Part of the modest rise in stocks on Wednesday points to a winner in the next few hours.
The results in the Senate and in the House of Representatives have not generated much optimism since the situation would continue as it has been until now, that is, a majority for each party, limiting the possibilities of an early fiscal stimulus.
From a technical point of view, USD / MXN still without a clear direction. A break of 21.50 would point to more ups, while to the downside, the consolidation below 21.00 would expose the September and October lows at 20.80 / 85, which is a relevant support, whose break could accelerate the bearish journey.
Credits: Forex Street
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