USD/MXN hits weekly lows but Mexican peso slowly loses shine
- Mexican peso continues to be among top performer, rally loses momentum.
- USD/MXN heads for third decline in-a-row holds above the 100-day SMA.
The Mexican peso extended the rally on Tuesday that followed the decision of US President Trump to suspend tariffs to Mexican imports. The USD/MXN bottomed at 19.08 during the American session but then rose back above 19.10.
As of writing point to 19.15 as equity prices in Wall Street and crude oil prices hit fresh daily lows. The shift in markets mood and some potential profit taking, favored the bounce to the upside in USD/MXN.
The pair still trades significantly below the level it closed on Friday. A gap between 19.62 and 19.32 remains open. The positive momentum for the Mexican peso eased over the recent session. A daily close well below 19.13 (100-day moving average) could point to further losses but the rebound back above could suggest that the slide could take a pause over the next sessions. On the upside, resistance levels might be seen at 19.25 (20-day moving average) and 19.30.
Data from the US and Mexico
In the US, PPI data released today had no impact on markets. Wholesale inflation came as expected. On Wednesday, CPI numbers are due.
In Mexico, the statistics institute INEGI published that the industrial output increased by 1.5% in April. It was the first increase in four months and could help the economy avoid recession after a contraction in GDP by 0.2% during the first quarter.
The outlook for the Mexican economy continues to be dominated by uncertainty. Despite the agreement between the US and Mexico, last week rating downgrades to Pemex and Mexico’s debt, added to concerns.
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.
