#USDMXN @ 18.2526 Mexican Peso slumps against the US Dollar, losing more than 0.60%
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- Mexican Peso slumps against the US Dollar, losing more than 0.60%
Mexican Peso (MXN) experienced a decline against the US Dollar (USD) due to robust data from the United States (US), which bolstered the Greenback (USD). Furthermore, US Treasury bond yields increased despite the growing consensus among investors that the US Federal Reserve (Fed) will maintain its current interest rates when it meets on November 1. Consequently, the USD/MXN exchange rate trades at 18.25, marking a 0.63% increase for the day.
Mexico released its inflation data before Wall Street opened, indicating that the Consumer Price Index (CPI) rate for the first half of October continued to decline. This is positive news, especially since the Bank of Mexico (Banxico) has maintained interest rates at 11.25% since March 2023, although market participants anticipate the first rate cut in 2024.
Furthermore, data from the United States indicated that business activity, as measured by S&P Global PMIs, rebounded from contractionary levels, with most indicators expanding above the critical 50 threshold that separates contraction from expansion.
Meanwhile, the USD/MXN would remain at the mercy of geopolitical risks, as the conflict between Israel and Hamas threatens to spread among countries within the Middle East, which could involve Western countries, if the flight escalates. That would be positive for the US Dollar and harmful for the Mexican Peso.
The USD/MXN is upward biased, and the price action of the last couple of days could form a ‘bullish-harami’ candlestick pattern on the daily chart. The USD/MXN pair’s first resistance would be the October 23 high at 18.37 before buyers lift the spot price to last week’s high at 18.46, before challenging 18.48, October’s high. Once those levels are cleared, the 18.50 figure would be up for grabs. Conversely, the USD/MXN must drop below the 18.00 psychological figure for sellers to reclaim the 200-day Simple Moving Average (SMA) at 17.73.
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