- Mexican peso is favored by change of mood in markets.
- USD / MXN with strong reversal, plummets from six-month highs.
- Mexico: inflation reaches 6% in September, in line with expectations.
The Mexican peso had an abrupt recovery and was one of the highest in the world on Wednesday. The change of mood in the markets after some relief in energy prices in Europe and the possibility of an agreement between lawmakers in the US to lift the debt ceiling was enough for the USD / MXN reversal.
The cross had reached as high as 20.88, the highest level in six months, and then plunged, closing the day below the key 20.60 zone. On Thursday it reached 20.44 and then returned to 20.50. It is back in the 20.40 / 20.65 range. A close above the latter would enable more raises, while below the peso could strengthen, targeting 20.20.
On US employment data will be released on Thursday, which will be the preview for Friday’s non-farm payrolls. On Mexico it was known that the inflation reached an annual rate of 6% in September. The data did not come as a surprise as it was in line with market expectations.
Should stability continue in the bond and equity markets on Thursday, along with the dollar correction, the USD / MXN could test 20.40. But if these conditions change, upward pressures could return.