- The dollar slumps after employment data, erasing recent gains.
- USDMXN heading for the lowest weekly close since March 2020.
USDMXN fell to 19.47, hitting the lowest level since early June and then bounced back up to 19.50, but remains bearish. This comes amid widespread dollar weakness and rising stock markets.
If it closes the week at current levels, USDMXN would have the lowest daily close since March 2020. The key is to see if it manages to assert itself below 19.50, which would enable further declines ahead. If it bounces and holds, there could be rallies, up to 19.80, where the nearest strong resistance is.
Dollar down despite data
The US employment report for October showed better-than-expected numbers across the board. Non-farm payrolls increased by 261,000 in October, above the 200,000 expected. The data initially pushed the dollar higher and equity markets lower, but after a few minutes, the dollar began a slide that is still continuing.
Among those that rise the most on Friday is the yuan Chinese and emerging markets. The latter also underpinned by the increase in the price of raw materials. Just as in previous sessions, the Mexican peso was not among the worst performers, on Friday it is not among the most advanced.
With the employment data, a busy week ends, which included the Fed’s decision. The next one will also be complete. In the US the focus will be on the October inflation data on Thursday. While in Mexico, there will be inflation data on Wednesday and on Thursday it will be the decision of the Bank of Mexico.
Technical levels
Source: Fx Street
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