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USDMXN reverses bearish trend after Neel Kashkari's statements

  • The president of the Federal Reserve (Fed) of Minneapolis, Neel Kashkari, pointed out that raising interest rates is not ruled out, although it is not the most likely thing.
  • The Mexican Peso reached a high of 16.93, respecting important support at the two-day low of 16.83.

The USD/MXN started today's session trading around 16.88. During the American session it reached a two-day low of 16.83, but after Neel Kashkari's statements, the Dollar appreciated against the Mexican Peso reaching a high of 16.93.

The President of the Federal Reserve (Fed) of Minneapolis, Neel Kashkari, also mentioned that if a marked weakening of labor is observed, he could push for a cut in interest rates. Kashkari noted that he would need to see several readings on inflation to have confidence in cutting rates. He also noted that a rate hike is not ruled out, although it is not the most likely.

Inflation and interest rates, the key data for the USD/MXN

Mexican peso traders are carefully awaiting inflation and interest rate data that will be released on Thursday. A decrease in core inflation and a slight rise in the general reading is expected. Regarding the interest rate, Banxico is expected to keep it unchanged at 11%.

Levels to consider in the Mexican Peso

Short-term supports are at 16.83 (day's low) and 16.65 respectively, located at the 38.6% and 23.6% Fibonacci retracements in convergence with the price action. Short-term resistances are located at 17.10 (price action level and convergence of 50% Fibonacci retracement) and 17.29 (61.8% Fibonacci retracement).

USDMXN 5-Minute Chart

USDMXN Daily Chart

Source: Fx Street

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