- Mexican peso fails to affirm key break.
- The dollar recovers before advance in the yields of treasury bonds.
- Mexico: moderate inflation, but still well above Banxico’s target.
USD/MXN is rising modestly on Monday and remains below 20.00. The pair had the lowest daily close in a month on Friday near 19.90. The short-term bias favors the Mexican peso, although it is not yet displaying enough strength to break with the consolidation mode.
Despite having the lowest close in days, and trading below 19.95, USD/MXN maintains a neutral bias. A statement below 19.90 will expose the key support at 19.80. To the upside, the break of 20.15/20 would enable further rallies, with targets at 20.25 and then 20.45.
The USD/MXN’s rebound on Monday is behind a recovery in the dollar after Friday’s fall. In addition, in the last few hours, Treasury bond yields have turned bullish, giving more support to the dollar. The advance of the USD/MXN is being limited by the rise in the equity markets.
Mexico: moderate inflation, but not so much
Monday in Mexico Inflation figures for mid-October were published. The consumer price index rose 0.44%, below the 0.53% expected, but the core rate rose 0.42%, more than the 0.35% market consensus.
The IPC had an annual variation of 8.53%, it is the lowest since the second half of July and implies a drop compared to the 8.64% of the previous fortnight.
Technical levels
Source: Fx Street
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