- The dollar advances firm on Friday in a climate of risk aversion.
- USD/MXN tests short-term resistance.
- Positive data from the US gives more support to the greenback.
USD/MXN rose from near 19.80 on Thursday to a two-week high on Friday, on a general strengthening of the dollar and a sharp decline in financial markets.
Emerging market currencies are under pressure and this time they are not escaping the strength of the dollar. On Wall Street, stocks are losing more than 1.30%, metals are plummeting and the price of a barrel of WTI is down more than 5%.
In a black for the financial markets USD/MXN climbed to 20.17, the highest since September 7. It remains close to the high and if it breaks firmly above 20.17, more rallies and a test of the 20.25 barrier would be expected. If there is a daily close above this last level, the dollar would gain support to extend the advance.
The greenback was not only favored by the decline in equity markets but also by the rise in Treasury bond yields, which moderated in recent hours. The recovery in bonds ran into a much better than expected figure from the preliminary PMI for September.
In Mexico On Thursday, the outstanding data was that of inflation for the first half of September, which showed a rise of 0.41% and the annual rate at 8.76%, just below the previous reading of 8.77% (maximum in decades). These figures, together with the rise of 75 basic points in the interest rate of the Federal Reserve on Wednesday, they practically discount that Banxico will do the same next week.
Technical levels
Source: Fx Street
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