Confirming you are not from the U.S. or the Philippines

By giving this statement, I explicitly declare and confirm that:
  • I am not a U.S. citizen or resident
  • I am not a resident of the Philippines
  • I do not directly or indirectly own more than 10% of shares/voting rights/interest of the U.S. residents and/or do not control U.S. citizens or residents by other means
  • I am not under the direct or indirect ownership of more than 10% of shares/voting rights/interest and/or under the control of U.S. citizen or resident exercised by other means
  • I am not affiliated with U.S. citizens or residents in terms of Section 1504(a) of FATCA
  • I am aware of my liability for making a false declaration.
For the purposes of this statement, all U.S. dependent countries and territories are equalled to the main territory of the USA. I accept full responsibility for the accuracy of this declaration and commit to personally address and resolve any claims or issues that may arise from a breach of this statement.
We are dedicated to your privacy and the security of your personal information. We only collect emails to provide special offers and important information about our products and services. By submitting your email address, you agree to receive such letters from us. If you want to unsubscribe or have any questions or concerns, write to our Customer Support.
Octa trading broker
Open trading account
Back

USD/MXN dives to new lows below 18.50, despite a strong USD

  • US Pending Home Sales improved, but investors are focused on core PCE figures on Friday.
  • Banxico’s monetary policy decision loom, with analysts expecting a 25 bps rate hike.
  • USD/MXN Price Analysis: Further downside is estimated, but Banxico’s decision could spur a leg-up.

The USD/MXN continues its free-fall during the week, down 1.45% since Monday, registering five days of consecutive losses. Sentiment improvement, and a strong US Dollar (USD), have not stopped the appreciation of the Mexican currency. At the time of writing, the USD/MXN is trading at 18.1060, down 0.69% in the day.

The Mexican Peso at the mercy of Banxico’s policy decision

A risk on impulse underpinned the Mexican Peso (MXN), which continues to drag the USD/MXN exchange rate, further below the psychological 18.50 barrier, eyeing to test 18.00. Investors’ appetite for risk improved on news that Alibaba will split into six business groups seeking Initial Public Offerings (IPOs). Therefore, Wall Street portrays an optimistic sentiment after a “short-lived” banking crisis.

A light economic calendar in the United States (US) featured that Pending Home Sales for February grew at a 0.8% MoM and exceeded estimates for a plunge of 0.3%, though on an annual basis, decreased by 21.1%, less than the 29.4% plunge foreseen.

Market participants ignored US data as they shifted to the US Federal Reserve’s (Fed) preferred gauge for inflation, the Core Personal Consumption Expenditure (PCE) for February, estimated at 0.4% MoM and 4.7%, annually based.

Additionally, Thursday’s calendar will be packed, with Initial Jobless Claims for the last week, and the Gross Domestic Product (GDP) for Q4

In the meantime, US Treasury bond yields are retreating, with 2s and 10s, each at 4.05% and 3.56%, respectively. The greenback climbs 0.27%, as shown by the US Dollar Index, up at 102.704.

On the Mexican front, the Bank of Mexico (Banxico) will unveil its interest rate decision on Thursday. Analysts foresee a 25 bps rate hike by Banxico. Expectations lie around a possible pause in the hiking cycle, which, although it favors the Mexican Peso (MXN) due to its interest rate differential, could trigger some profit-taking. Therefore, further upside in the USD/MXN could be possible.

USD/MXN Technical analysis

USD/MXN Daily chart

From a daily chart perspective, the USD/MXN is downward biased, eyeing a renewed test of YTD lows at 17.8968. But, the USD/MXN pair needs to clear some hurdles on its way south, like the 18.00 figure, followed by the March 7 low of 17.9664, before challenging the YTD low. If that price level is cleared, the next support would be July 2017 low at 17.4498.

Conversely, the USD/MXN’s first resistance would be the 20-day Exponential Moving Average (EMA) at 18.4607. But oscillators staying at bearish territory suggest the least resistance path is downwards.

 

Fed's Barr: We'll look at data and make meeting-by-meeting judgement on rates

"We will be looking at incoming data, financial conditions to make a meeting-by-meeting judgement on rates," Federal Reserve Vice Chair for Supervisio
Read more Previous

Russia Industrial Output came in at -1.7%, below expectations (-1.5%) in February

Russia Industrial Output came in at -1.7%, below expectations (-1.5%) in February
Read more Next