- The dollar remains weakened by low yields.
- Emerging market currencies with mixed results on Monday.
- USD/MXN with bearish bias, as long as it remains below 20.55.
USD/MXN is rising modestly on Monday, on the downside in equity markets. The rise is being moderate as the dollar remains somewhat weak. The cross after falling to 20.26 bounced and trades at 20.36. Hours ago he tested the highs of Friday at 20.42 without being able to overcome them.
After the best month since 2020, the stock markets moderate their optimism at the beginning of August. This may weigh on demand from emerging markets. But on the other hand, if the rally continues, the USD/MXN will have more to go down.
From a technical point of view, the bias in favor of the Mexican peso in the short term can continue as long as it is below 20.55. The next key level to the downside is at 20.15, a horizontal support and where the 100 day moving average is passing.
In Mexico, the Manufacturing PMI report will be published on Monday, and on Tuesday it will be the turn of consumer confidence figures. In the US, the week will kick off with figures from the manufacturing sector (PMI and ISM). The key data will be the official US employment report.
The market continues to analyze what the Fed meeting left last week. This is weighing on the bond market, with yields on US equities stable at lows in months, keeping the dollar weak in the market.
What the FOMC left will also be important for the Bank of Mexico, which will have its next meeting on August 11.
USD/MXN day chart
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Technical levels
Source: Fx Street
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