USD/MXN rises for the third day in a row despite oil rally
|The US Dollar is rising for the third day in a row against the Mexican peso. The greenback is recovering ground after falling to the lowest in more than a year last week. The 3% rise in crude oil price is not helping the Mexican currency on Tuesday, the day before the FOMC decision.
USD/MXN correcting higher
The pair today peaked at 17.78, the strongest in a week. From Friday’s low, it has risen 1.65%. Despite the recovery, the trend continues to favor the downside. The pair is testing the resistance area around 17.80 (June lows). A consolidation on top could clear the way for a test of a downtrend line that currently stands at 18.15.
If it holds under 17.80, a retreat seems likely, probably toward 17.45/50, the key short-term support. The bearish trend remains intact from a technical perspective.
Mexico: Inflation starts to slowdown still above target
Yesterday, the INEGI released inflation data. The CPI rose 0.24% during the first half in July. The annual rate stood at 6.28%, below the previous 6.33%. It is the first time in months that the rate shows a decline.
It is a signal that inflation is starting to slowdown. That would remove pressure for another rate hike from the Bank of Mexico. Still, the CPI index remains above the 4% target.
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