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The Mexican Peso (MXN) trades slightly higher in its major pairs on Monday, continuing to benefit from relatively higher interest rate expectations in Mexico following last week\u2019s central bank decision.\u00a0<\/a><\/p>\n USD\/MXN is exchanging hands at 16.76, EUR\/MXN at 18.06 and GBP\/MXN at 21.01, at the time of publication.\u00a0<\/p>\n The Mexican Peso trades higher, on the back of favorable interest rate expectations \u2013 a major driver of FX, where funds tend to flow to countries with higher interest rates.\u00a0\u00a0<\/p>\n At the Bank of Mexico (Banxico) meeting last Thursday, the central bank decided to leave its policy rate unchanged at 11.00% after cutting by 0.25% in March. It cited persistent inflation as the reason for not cutting again, leading to a rebound in the Peso.\u00a0<\/p>\n The central bank also upwardly revised its inflation forecasts for the next six quarters, which indicates it sees an environment of sustained inflationary pressures ahead. This makes it less likely to lower interest rates in the short-term, further supporting the Mexican Peso.<\/p>\n USD\/MXN \u2013 the value of one US Dollar in Mexican Pesos \u2013\u00a0 decisively broke below the bottom of a short-term range at 16.86 last week, reflecting the continued strengthening of the Mexican Peso.\u00a0<\/p>\n The breakout of the range \u2013 which could also possibly be interpreted as a descending triangle pattern \u2013\u00a0was a decisive technical development that suggests a protracted move lower.\u00a0<\/p>\nMexican Peso edges higher on interest rate expectations<\/h2>\n
Technical Analysis: USD\/MXN consolidates within a down trend<\/h2>\n
USD\/MXN 4-hour Chart\u00a0<\/h3>\n