The Mexican peso erased losses against the US dollar during the American session and approached last week highs. USD/MXN peaked earlier today at 18.53 and currently is trading at 18.47, slight above daily lows that reached earlier at 18.43.
On a quiet session the pair lost strength amid a recovery in crude oil prices. Most crosses in the forex market are trading in minor ranges.
USD/MXN keeps downside bias
Last week the pair dropped to 18.33 reaching the lowest sine the US presidential election. Then it managed to rebound and rose above the key 18.45/50 area. A consolidation significantly below 18.45, would open the doors for an extension of the decline, possibly to test 18.00. On the opposite direction, if the pair rises above 18.90, it could clear the way for a test of the key medium-term resistance at 19.20/25.
Data and elections
On the fundamental perspective, in the US, the key report of the week will be on Friday with the NFP that could affect the US dollar.
In Mexico, the central bank will release the quarterly inflation report on Wednesday and the minutes of its latest meeting on Thursday. “At that meeting, the central bank surprised many in the markets by hiking 25 bp to 6.75%. Next meeting is June 22, and another hike then seems likely if the Fed hikes on June 14”, said analysts from Brown Brothers Harriman. They also noted that the state of Mexico holds its gubernatorial election on Sunday and is an event to take into account.
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