- Strong fall in emerging currencies, with the Brazilian real and the Mexican peso among the worst.
- USD / MXN ends the downward correction and could retest 21.00.
USD / MXN is up nearly 1% on Wednesday driven by a The dollar rally due to an advance in Treasury bond yields and also due to the change in the trend in the equity markets that fell before the opening of Wall Street.
Emerging currencies are under pressure with the dollar advancing more than 1% against the Brazilian real, which among the most operated is the one with the worst performance. Negative market climate coupled with a rebound in the dollar is putting emerging market assets under pressure.
US data is on the back burner to bond market events. It was known that the private sector, according to ADP, created 117,000 jobs, below the 177,000 expected. On Friday it will be the turn of the employment report, with the non-farm payrolls and the unemployment rate.
In Mexico, the context is not very positive either after the approval in the Senate of the electricity reform law. To this are added details, which do not have much weight in themselves, but configure a scenario that according to analysts may affect future investment. The state oil company, Pemex, canceled its rating contract with Fitch Ratings. Another negative news was that the Treasury report showed that in January budget revenues had the most important drop since 1993 (-12% in real terms compared to January 2020).
Technical overview
The bullish tone remains in place for the USD / MXN. It is testing the resistance of 20.80 and if it exceeds this area, the focus would change to 21.00. A confirmation on 10.21 would enable more uploads.
In the opposite direction, now the supports are seen at 20.65, followed by 20.50 / 55, where are the lows of the current week.
Technical levels
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