- Mexican peso gains versus USD remains sideways in a wide range.
- US Dollar recovers across the board during the US session, extends gains versus majors.
The Mexican peso is still up versus the US Dollar on Monday but it moved off daily highs during the American session as equity prices in Wall Street trimmed gains. The Dow Jones hit fresh all-time highs and now is up by just 0.14%, far from the high.
The retreat from the top took place amid a rally of the US Dollar across the board, including majors. The agreement to resume trade talks between US and China boosted risk appetite and favored the Mexican peso. But it also tampered rate cut expectations from the Federal Reserve. Market participants continue to expect a rate cut but not as aggressively as before.
US data contributed to the change toward a less dovish Fed. The Institute for Supply Management released its June manufacturing index fell to 51.7, the reading was the lowest since October 2016 but above expectations. The Markit PMI report showed the Manufacturing index came in at 50.6, up from 50.1 and in line with expectations.
USD/MXN Key levels
The USD/MXN dropped to 19.03, the lowest in a week but then turned to the upside, rising back above the 19.10 area. It trades at 19.11, down 0.50% from Friday’s close.
The pair continues to trade in a familiar range as the Mexican peso continues to be unable to hold below 19.10 and with the US dollar losing strength above 19.25. The key resistance to the upside is the 19.30 area: a daily close on top would point to further gains. On the flip side under 19.00, the 18.90 protects YTD lows around 19.75.
Share
