USD/MXN jumps to 20.75 as market sentiment deteriorates
- The rally of the US dollar continues on Friday, DXY breaks above 92.00.
- USD/MXN heads for the highest weekly close since February.
The Mexican peso remains under pressure against the US dollar. The USD/MXN jumped to 20.75, reaching the highest level since late March. The pair is hovering around 20.65, holding onto gains.
The dollar is rising for the sixth consecutive day versus the Mexican peso amid a deterioration in market sentiment after the FOMC meeting. The peso is among the worst performers of the current week, together with the South African rand and the Turkish lira. The USD/MXN has risen more than 4% on the biggest weekly gain since September of last years.
Banxico next week but…
Next Thursday, the Bank of Mexico will announce its decision on monetary policy. No change in the key rate is expected (4%) but the usual hawkish bias will likely be reinforced after the recent spike in volatility across financial market, the depreciation of the Mexican peso, and global higher yields, in the context of higher inflation in Mexico.
Despite the meeting, price action of emerging market currencies will likely be decided by the US dollar and the risk tone. The market has clearly made a shift in favor of broad-based strength of the greenback.
Technical levels
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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.
