USD/MXN tumbles to lowest since January 2021 near 19.50
- Mexican peso among top performers on Friday.
- USD/MXN trades at the lowest level since January 2021.
- Risk appetite, a weak dollar and a hawkish Banxico supports MXN's rally.
The USD/MXN is falling sharply on Friday, with the Mexican peso leading across the board. The pair tumbled to 19.56, reaching the lowest intraday level since January 2021.
The combination of technical factors, a weaker dollar, steady US yields, and risk appetite pushed USD/MXN further to the downside. It is headed toward the lowest weekly close since March 2020.
The break below the support area around 19.70 added weighed to the downside. The next critical support is seen at the 19.50 zone followed by 19.30. To alleviate the bearish pressure, the dollar needs to rise back above 19.90.
Equity markets are rising again on Friday. In Wall Street, the S&P 500 gains 1.64% and is up by more than 5% for the week. Main indices are about to post the first gain after falling for seven weeks in a row. The improvement in market sentiment boosted the demand for emerging market currencies.
The weaker dollar and steady yields also contribute to the slide in USD/MXN. The DXY is falling 0.15%, about to post the lowest daily close since April 25. At the same time, US yields remain steady, not reacting to risk appetite. The US 10-year stands at 2.72%, slightly above the weekly low.
Another positive factor for the Mexican peso was the “hawkish” minutes from Banxico’s latest meeting when it rose rates by 50 bp to 7%. “The minutes show that more policymakers were open to a larger move as another said it would reinforce the bank’s autonomy and have more impact on long-term inflation expectations,” explained analysts at Brown Brothers Harriman. The next board meeting is on June 23.
USD/MXN weekly chart
Reprinted from FXStreet,the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.