USD/MXN hits 2-week highs, near 19.00

  • US dollar up against emerging market currencies ahead of NFP and FOMC meeting. 
  • MXN drops to lowest in two weeks. 
  • A new rate hike from Banxico more likely after latest inflation data. 

The USD/MXN pair continued to rise on Thursday and reached 18.99, the highest level in two weeks. Afterwards pulled back and it was at 18.90, consolidating weekly gains. The pair is being supported by a stronger US dollar. The greenback rose across the board and particularly against emerging market currencies, including the peso. 

The short-term outlook continues to favor the upside in USD/MXN. It broke the 18.90 resistance and now is testing the 19.00 zone. The mentioned area could limit the upside in the short-term but if it rises on top, it could lead to a rally to 19.30 (intermediate resistance at 19.15). 

Mexico: Inflation accelerates 

Data released today showed that inflation accelerated for a second straight month in November. The annual rate reached 6.63% up from 6.37% and slightly below the 6.66% 16-year high of August. 

The rebound in inflation coincides with a depreciation of the Mexican peso. Next week, one day after the FOMC meeting, Banxico will make its decision. It will be the first meeting presided over the next governor Alejandro Díaz de Leon. A while ago expectations were title toward Banxico keeping rates unchanged, but today’s data, adds pressure on the central bank to act and now a rate hike seems likely. 


 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.