USD/MXN rises back above 19.00 after a brief pullback – Crypto News – Crypto News
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USD/MXN rises back above 19.00 after a brief pullback – Crypto News

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2 years ago

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  • Mexican Peso remains under pressure versus the US Dollar
  • USD/MXN tests levels above 19.00, up 2.5% from Wednesday’s low.

The USD/MXN is trading slightly above 19.00, looking at the weekly high it hit earlier on Thursday at 19.05. The pair resumes the upside after a brief pullback to 18.89. On Wednesday, it traded as low as 18.56, the lowest since February 2020.

The Mexican Peso has been unable to benefit from the rebound in commodity prices. At the same time, the US Dollar remains firm supported by economic data and higher US yields.

New data, the old debate and a new member for Banxico

Economic data released on Thursday in the US came in above expectations (Initial Jobless Claims and Philly Fed) and helped market sentiment. Still, Wall Street’s indexes are in red. Emerging market currencies remain under pressure, extending the correction from multi-day highs. The rebound in commodity prices on Thursday is being offset by higher US yields.

The US hit the debt limit and the Treasury began to implement special measures to avoid a default. The debate on raising the debt ceiling in Congress is set to be complex as Republicans hold the House and Democrats the Senate.

In Mexico, Congress voted to confirm Omar Mejia, the government’s nominee for the Bank of Mexico for an eight-year term. Relatively unknown to market participants prior to his nomination, Mejia’s first vote on the board will be at its next meeting on February 9. He backed the current interest rate hike cycle and promised transparency and independence.

USD/MXN technical outlook

The USD/MXN is staging a solid rebound. Technical Indicators are turning to the upside in the daily charts, Price still remains below the 20-day Simple Moving Average that awaits at 19.17. If the pair manages to break and hold above 19.00/05, the next strong barrier emerges at 19.30.

A slide back to 18.80 would be seen as a normal correction to the recent rally. If it drops below, the Mexican Peso would recover some strength.

USD/MXN daily chart

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