The Mexican peso continues to rise again the US dollar and today it reached a fresh 4-month high. USD/MXN dropped below 19.00 for the first time since the US presidential election.
The pair bottomed at 18.97 and it was hovering slightly below 19.00. The greenback weakened today against emerging market currencies. Also, the recovery in crude oil prices helped the Mexican peso.
At the moment the pair is holding below a strong support psychological area that is the 19.00 handle, and also around that level, a medium-term uptrend line stands. If USD/MXN consolidates below current levels it could open the doors to an extension of the decline.
Light calendar, Banxico next week
From the fundamental side, no economic data from the US was released today. Regarding data, the biggest day of the week will be on Friday with the durable goods order report.
In Mexico, the mid-March CPI index will be released on Thursday and retail sales data on Friday. “Inflation is still above target, but the firmer peso should help limit price pressures going forward. As such, we believe the bank will remain on hold this month as the economy remains sluggish”, said analysts from Brown Brothers Harriman.
The next meeting of the Bank of Mexico will be March 30. Some analysts point to a rate hike while others expect the central bank to remain on hold.