USD/MXN Price Analysis: Mexican peso drops as Fitch downgrades Mexico to BBB-

USD/MXN surges to a one-week high.
Fitch downgrades Mexico to BBB-, outlook stable.
US Dollar remains on the front foot amid broad risk aversion.

Anil Panchal FXStreet

Early Thursday morning in Asia, global rating giant Fitch downgrades Mexico’s credit rating from BBB to BBB- with a stable outlook.

Following the news, the USD/MXN pair surged from 23.95 to 24.30, currently around 24.23, while also probing the weekly top.

Also contributing to the pair’s strength could be the US dollar’s strength amid a broad risk-off wave mainly driven by the rise in the coronavirus (COVID-19) fatalities, downbeat US data and fears of the global recession.

Furthermore, oil price weakness can also be counted as a positive for the pair due to Mexico's reliance on the energy industry. WTI dropped on Wednesday, currently pressured around $20.00, as a surge in the official inventory data from the US added weakness into the oil benchmark.

While portraying the risk-off, Wall Street closed in red and the US 10-year Treasury yields dropped 11 basis points to 0.635% by the end of Wednesday in the US markets.

Moving on, traders will keep eyes on the US economic docket and the virus updates for fresh impetus while oil catalysts will also have their effects on the pair.

USD/MXN forecasts chart

Following its break of 200-HMA, USD/MXN is currently rising towards 24.80. It’s worth mentioning that sellers will look for entry below 23.80.

Trend: Further recovery expected

Additional important levels

Overview
Today last price	24.2572
Today Daily Change	0.8659
Today Daily Change %	3.70%
Today daily open	23.3913

Trends
Daily SMA20	24.0339
Daily SMA50	21.4156
Daily SMA100	20.1963
Daily SMA200	19.8039

Levels
Previous Daily High	23.7578
Previous Daily Low	23.3885
Previous Weekly High	25.7809
Previous Weekly Low	23.3192
Previous Monthly High	25.459
Previous Monthly Low	19.1536
Daily Fibonacci 38.2%	23.5296
Daily Fibonacci 61.8%	23.6167
Daily Pivot Point S1	23.2673
Daily Pivot Point S2	23.1432
Daily Pivot Point S3	22.898
Daily Pivot Point R1	23.6366
Daily Pivot Point R2	23.8818
Daily Pivot Point R3	24.0059

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.