USD/MXN remains steady below 19.75 after Banxico cut rates


  • Bank of Mexico lowers rate by 25bp points to 8.00%. 
  • Mexican peso remains steady against the US Dollar, close to monthly lows. 

The USD/MXN pair rose to test weekly highs at 19.75 and then pulled back following the release of the statement from the Bank of Mexico. As of writing trades at 19.60, modestly lower for the day. 

The Mexican peso, as most Emerging market currencies are higher today against the US Dollar posting modest gains as Wall Street and other equity markets stabilize following yesterday’s losses. 

Despite moving off highs, USD/MXN still holds a bullish bias but it needs to break and hold on top of 19.80, to clear the way to more gains and signal a test of 20.00. On the flip side, the immediate support could be seen around the 19.60 area, and below at 19.30/35. A close below the last one would strengthned the Mexican peso. 

Banxico cut interest rate, no major surprise 

“Banco de México’s Governing Board has decided to lower the target for the overnight interbank interest rate by 25 basis points to 8.00%”, opens up the statement from Banxico. It was seen keeping rates on hold, but the cut represents no surprise as the Mexican economy is practically stagnated and inflation continues to trend lower. 

Taking into account headline inflation has decreased as foreseen, the greater than expected widening in the amount of slack in the economy, and the recent behavior of the external and domestic yield curves at various terms, Banxico decided to cut the overnight interest rate 25 basis points to 8.00%, “considering that under the current environment such level is consistent with the convergence of headline inflation to the central bank’s target within the time frame in which monetary policy operates.” 

The decision was not unanimous. One member voted to keep rates unchanged. It was the first cut since June 2014. 

USD/MXN

Overview
Today last price 19.6239
Today Daily Change -0.0505
Today Daily Change % -0.26
Today daily open 19.6744
 
Trends
Daily SMA20 19.2725
Daily SMA50 19.1931
Daily SMA100 19.138
Daily SMA200 19.3573
Levels
Previous Daily High 19.7538
Previous Daily Low 19.3682
Previous Weekly High 19.7404
Previous Weekly Low 19.2981
Previous Monthly High 19.3628
Previous Monthly Low 18.8643
Daily Fibonacci 38.2% 19.6065
Daily Fibonacci 61.8% 19.5155
Daily Pivot Point S1 19.4439
Daily Pivot Point S2 19.2133
Daily Pivot Point S3 19.0583
Daily Pivot Point R1 19.8294
Daily Pivot Point R2 19.9844
Daily Pivot Point R3 20.215

 

 

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