- Mexican peso drops modestly versus US dollar, hold on to weekly losses.
- USD/MXN accelerating to the upside, but still under 25.00.
The USD/MXN is rising on Friday, posting the fifth daily gain in a row. As of writing it trades at 24.87, the highest intraday level since April 6. The Mexican peso’s recovery was short-lived, and it resumed to the downside, as the US dollar strengthened versus emerging market currencies.
The worst performer on Friday is the Brazilian real with USD/BRL gaining almost 3% at 5.70, a record high. The resignation of Justice Minister Moro accelerated the rally. The Mexican peso drops versus the greenback but it recovers ground against other EM currencies.
The stabilisation in crude oil prices and a relatively quiet session in Wall Street is not helping sentiment toward riskier assets. Concerns about the economic impact of the coronavirus on Latin American are on the rise as governments extend lockdowns.
Technical outlook
The USD/MXN bullish bias is intact, and a test of 25.00 is on the cards. The momentum could ease with a slide under 24.50, the immediate support. The critical level on the downside is seen around 23.80/24.00 (uptrend line); a break lower would clear the way for a slide to 23.30.
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