USD/MXN gains momentum and rises to 19.10 after government presents a new plan for Pemex
|- Mexican peso among worst performers, after the government revealed its new plan for Pemex.
- Greenback gains across the board supported by US data.
The USD/MXN pair broke a 1-day range to the upside and is trading now at the highest level in two days with a strong bullish momentum. After spending 24 hours between 18.95 and 18.99, it jumped to 19.09. As of writing trades near the highs, looking at the 19.10 resistance area.
The move to the upside was driven mostly by a weaker Mexican peso; also amid a stronger US Dollar. June Retail Sales data for the US showed higher than expected gains and triggered a move to the upside in US yields and boosted the greenback, particularly against majors.
MXN: No love from the new plan
The Mexican peso tumbled across the board following the released of Pemex’s business plan. According to the project, Mexico will reduce the tax burden of the state oil company by around $7billion over the next two years and inject capital to build a new refinery and raise output.
Pemex credit rating was downgraded several times over the last quarter, and more are expected. So far, the plain failed to impress investors. Among the concerns is the plan to build a new refinery that could cost $8 billion. Last week, former Finance Minister Urzua resigned, among other things, opposing the new refinery. Later today, more details will be presented.
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