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.
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.
