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The Mexican Peso depreciated versus the US Dollar during the North American session on Monday after Bank of Mexico (Banxico) Governor Victoria Rodriguez Ceja commented, \u201cWe could evaluate downward adjustments\u201d to the main reference rate. In the meantime, traders brace for the release of the latest inflation figures in the United States (US), which would be the spotlight as the Federal Reserve (Fed) delineates its monetary policy path. The USD\/MXN trades at 16.81, up 0.51%.<\/p>\n
Banxico Governor Victoria Rodriguez Ceja noted that the increase in general inflation was due to volatile non-core components. Nevertheless, she added that core prices continued a \u201cvery clear\u201d downtrend. She added that depending on the evolution of the inflationary outlook<\/a>, the Mexican central bank could evaluate whether to continue lowering interest rates, starting with the next meeting on June 27.<\/p>\n Last week, Banxico decided to keep rates unchanged at 11.00% following March\u2019s first rate cut. In its monetary policy statement, the Governing Council mentioned that inflationary shocks \u201care foreseen to take longer to dissipate,\u201d which spurred an upward revision of inflationary figures.<\/p>\n Across the border, the US economic docket<\/a> featured a speech by Fed<\/a> Vice-Chair Philip Jefferson, who said that it\u2019s appropriate to keep policy rates restrictive until inflation ebbs.<\/p>\n The USD\/MXN downtrend remains in play, but a daily close above last Friday\u2019s high of 16.81 could form a \u2018bullish engulfing\u2019 candle pattern, which could pave the way for a leg up. In the near term, momentum favors sellers as the Relative Strength Index (RSI) remains bearish but is briskly turning bullish.<\/p>\n If buyers lift the exchange rate above the 100-day Simple Moving Average (SMA) at 16.92, that could exacerbate a rally toward the 17.00 psychological level. A breach of the latter would expose the 200-day SMA at 17.17, followed by the January 23 swing high of 17.38 and the year-to-date high of 17.92.<\/p>\n On the flip side, a bearish continuation could resume if the USD\/MXN tumbles below the 50-day SMA at 16.78, opening the door to test the 2023 low of 16.62, followed by the current year-to-date low of 16.25.<\/p>\nDaily digest market movers: Mexican Peso drops amid a light economic docket<\/h2>\n
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Technical analysis: Mexican Peso falls as USD\/MXN rises above 16.80<\/h2>\n