USD/MXN trims losses after hitting the lowest level since 2020 near 19.00
- US Dollar falls again versus Emerging Market currencies.
- USD/MXN hits lowest level since February 2020 and the rebounds.
The USD/MXN broke below 19.25 and fell to 19.03, reaching the lowest level since February 2020. During the beginning of the American session, the dollar started to recover ground. As of writing, the pair is hovering around 19.17, far from the lows, still on its way to the lowest daily close in years.
The area around 19.00/05 is a major support. A break lower would open the doors to more losses. As long as it remains above, a consolidation between 19.00/05 and 19.25/30 seems likely.
The decline took place amid a rally of emerging market currencies. USD/BRL is falling by 1.20%, USD/KRW by 1.05% and USD/ZAR by 1.05%.
Key data ahead
US Q3 GDP data is due on Wednesday. The critical report of the week will be on Friday with the numbers from the US official employment report. Non-farm payrolls are expected to rise by 200K and the unemployment rate to remain at 3.7%.
In Mexico, the central bank will release on Wednesday its quarterly inflation report. The November CPI is due December 8. While inflation headline have been trading lower, the core is at multi-year highs.
“At the last policy meeting November 10, the bank hiked rates 75 bp to 10.0% and said “In its next meetings, the Board will assess the magnitude of the upward adjustments to the reference rate based on the prevailing conditions.” This suggests a potential downshift to 50 bp at the next meeting December 15. Indeed, there was one dissent in favor of a smaller 50 bp move and others may follow if inflation pressures ease”, explained analyst at BBH.
Technical levels
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.
