- Mexican peso plummets on risk aversion.
- USD/MXN accumulates an advance of 3.5% in two days.
- Wall Street futures fall 2% on average.
The USD/MXN accelerated the gains on Monday, after the big jump on Friday and climbed to 20.42, the highest level in a month. The increases with respect to last Thursday exceed 3.5%. The upward trend accelerated in the face of a general deterioration in stock markets throughout the world.
On Friday the main indexes of wall street They fell 3% on average and futures on Monday fell 2.5%. In Europe the falls are around 2%.
The dollar is rising on all fronts on Monday against a backdrop of risk aversion and at the same time with an advance in Treasury yields. Yields are at their highest in years.
Fears in the markets are not leading to increased demand for Treasuries, which is reflecting expectations of aggressive policy from the Federal Reserve. This intensified after Friday’s US inflation data.
Among the emerging ones, for the moment, The Mexican peso is one of the most affected and has fallen on several fronts, although not all markets are operating yet. The USD/MXN went from a two-year low near 19.50 in just a few sessions, to rising sharply above 20.00.
The pair moved away from the highs and trades at 20.30. The bullish tone remains intact. At the moment the resistance zone of 20.45 has stopped the rises. Should it break and firm above, further advances would be expected, initially towards April’s high at 20.63.
Technical levels
Source: Fx Street
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