- USD/MXN probes three-day losing streak.
- S&P downgrades Mexico from BBB+ to BBB while keeping the negative outlook.
- The US dethrones China with the largest coronavirus numbers.
With the global rating giant S&P probing the Mexican peso buyers, USD/MXN takes a U-turn from a seven-day low of 22.86 to 23.25 amid the early Asian session on Friday.
The S&P cuts down the nation's credit rating from BBB+ to BBB while keeping the outlook negative. Traders reacted to the news in full steam despite inactive market hours in Mexico.
The reason could be traced from the US neighbor’s sufferings due to the coronavirus (COVID-19) as well as the beating through the latest declines in the oil prices.
The nation’s statistics mention 475 cases of the pandemic but President Andrés Manuel López Obrador has been criticized over not being able to take the case seriously while also hiding the actual figures. Further, Governor Miguel Barbosa was also recently triggered public outrage while claiming that the poor are immune to the virus.
On the other hand, oil prices dropped from $25.60 to $24.20 by the end of the settlement period for Thursday. The catalyst to blame could be the demand-supply mismatch due to the virus and the increased production.
It should also be noted that the US dollar isn’t immune to the epidemic as the US Dollar Index also dropped heavily to seven-day low with the surge in COVID-19 cases making it surpass the epicenter China.
Investors will now concentrate on the US House voting on the $2 trillion aid package as well as the virus data/updates for fresh impulse. It should also be noted that the call to stricter rules near the US-Mexico border might also be observed for intermediate moves.
USD/MXN forecast chart
The pair needs to regain its place beyond the 10-day SMA level, currently at 23.87, on the daily chart, failure to do so can keep dragging it to 21-day SMA near 22.00.
Trend: Pullback expected
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 assets. 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 Open Markets 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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.