USD/MXN breaks above 19.10, hits highest in two weeks
|- US Dollar posts strong gains across the board, even against EM currencies.
- USD/MXN heads for the highest close since June 28.
The USD/MXN pair broke the relevant short-term resistance at 19.10 and climbed to 19.17, the highest level since July 10. A stronger US Dollar boosted the pair to the upside.
The outlook now favors further gains from a technical perspective as long as it remains on top of 19.10. The next strong resistance area is 19.25/30. Despite today’s rally, USD/MXN continues to move in a wide range with 18.90 being the key support and 19.30 the upper limit. A daily close above would clear the way to more gain to 19.45/50.
Mexico: negative economic outlook, inflation data on Wednesday
Analysts continue to revised lower their forecast for economic growth for the current year that now is seen under 1%. The International Monetary Fund today presented its World Economic Outlook. They see Mexico will grow 0.9% below the previous estimate of 1.6%.
On Wednesday, mid-month inflation data is due in Mexico, a key input for Banxico. “Both headline and core inflation are likely set to remain steady in annual terms in the first half of July. We expect increases of 0.31% and 0.17% 2Wo2W for headline and core inflation, translating into 3.89% and 3.81%
YoY, respectively, compared to 3.89% and 3.83%, respectively in the second half of June”, wrote analysts at BBVA. They see headline inflation is likely to ease to 3.7% next month before falling more markedly during the fourth quarter.
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