USD/MXN back below 19.00, moves away from record highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    The Mexican peso is rising versus the US dollar for the second day in a row amid risk appetite, moving in a recovery mode after plunging last week.

    USD/MXN jumped above 19.00 last Thursday and reached a new intraday record high at 19.44, but then started to pull back. On Friday, it dropped from 19.14 to 18.91 and today bottomed at 18.80, the lowest levels since Wednesday.

    The area around 18.80 so far is offering support, after being a strong resistance during January. A break below could open the doors for an extension of the corrective move. To the upside, a consolidation back above 19.15 could strengthen the US dollar.

    Today’s recovery is being supported by an improvement in risk appetite and by rising crude oil prices. The barrel (WTI) is trading slight below $30.00, up more than 1.50%.

    Banxico: Minutes coming

    The most relevant economic event for the current week in Mexico will be on Thursday with the release of the minutes of the latest monetary policy meeting at the Bank of Mexico, when it kept rates unchanged at 3.25% as expected. “The accompanying statement was on the dovish side and suggests that Fed policy is more central to Mexican policy than domestic factors. That said, we think that continued peso weakness raises the odds of Banco de Mexico (Banxico) tightening”, wrote analysts from Brown Brothers Harriman.
    For more information, read our latest forex news.

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