Categories: Markets

USDMXN continues to depreciate after FOMC members' speeches

USDMXN continues to depreciate after FOMC members' speeches
  • The Mexican Peso maintains a bearish outlook given the statements by FOMC members and the employment data published on May 3.
  • Thomas Barkin stressed that the Federal Reserve's work on inflation is not yet finished.
  • John C. Williams believes that the American economy continues to grow, although at a slow pace. It expects a GDP between 2.0% and 2.5% in 2024.

The USD/MXN opened Monday trading around 16.99, but progressively lost ground during the European and American sessions. Following the statements of the FOMC members, the Dollar has fallen against the Mexican Peso to a daily low of 16.85.

Richmond Federal Reserve (Fed) President Thomas Barkin mentioned that the key risk remains that inflation remains above target.

John C. Williams, President of the New York Federal Reserve, expressed his concern about the increase in public debt that is reflected in somewhat higher interest rates in the world, although he noted that eventually there will be rate cuts by the Fed.

The focus for USD/MXN traders now turns to Banxico's interest rate decision, which will be announced this Thursday, with rates expected to remain at 11%. Previously, Mexico will publish its inflation figures for April.

On the other hand, it should be noted that historically, volatility increases during election times; The key date will be June 2, when Mexicans take to the streets to elect their next leaders.

The Mexican Peso approaches 16.65, a key technical level

After the maximum of 17.92 reached on April 19, the Mexican Peso continues its appreciation towards 16.65, whose confluence is given by the price action level and the 23.6% Fibonacci.

USDMXN Daily Chart

Source: Fx Street