USD/MXN approaches 19.00: Mexican peso losses 4.5% in 3 days
- Mexican peso, the worst performer over the last three trading days.
- USD/MXN rises from 18.00 to near 19.00 in a week.
The Mexican Peso remains under pressure at the beginning of the week and dropped sharply across the board. It is the third significant slide in-a-row. USD/MXN rallied 4.5% since Thursday.
The pair rose today from 18.55 and recently peaked at 18.91, the highest level since early March. Near the end of the session, it was trading at 18.89, headed toward the strongest close since January.
The combination of a stronger US Dollar amid higher US yields, profit-taking and the likely win of Andrés Manuel López Obrador at the Mexican presidential elections affected the Mexican Peso. On Sunday, the first presidential debate took place ahead of the July 1 elections.
Regarding economic data, analysts from Brown Brothers Harriman explained that Mexico reports mid-April CPI tomorrow, which is expected to rise 4.7% y/y vs. 5.2% in mid-March. “If so, it would be the lowest since January 2017 but still above the 2-4% target range. Banco de Mexico releases its minutes Thursday. Next policy meeting is May 17, no change is expected then if the peso remains stable.”
Technical levels
The rally of USD/MXN stopped today slightly below the 18.95/19.00 area, a strong resistance area that capped the upside also back in February and March. A break higher could clear the way to more gains with a target at 19.30. On the flip side, now 18.70 is the immediate support followed by 18.55 and then 18.30.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
