USD/MXN climbs back above 18.80, moves away from monthly lows
FXStreet News

USD/MXN climbs back above 18.80, moves away from monthly lows

  • US dollar rises versus emerging market currencies, but DXY drops. 
  • USD/MNXN rises further during the American session,  Mexican peso drops versus US dollar.

The USD/MXN pair accelerated to the upside and climbed to 18.86, hitting a two-day high. The Mexican peso is falling sharply versus the US dollar, erasing weekly gains and moving away from the highest level in months. 

On Wednesday, USD/MXN approached the 19.65 area that is becoming a critical support. Again it rebounded. If the pair manages to post a daily close above 18.85, the short-term outlook would favor more gains. 

On the fundamental front, concerns about the spread of coronavirus continue to weigh on markets. Risk aversion affected particularly emerging market currencies on Thursday that were the worst performers. The US dollar posted mixed results. Despite the rally versus EM currencies, the DXY suffered the worst decline in weeks, ending a five-day positive streak. 

US and Mexico: Different growth stories 

Data released today showed the US economy expanded at a 2.1% annualized rate during the fourth quarter and 2.3% during 2019. In Mexico, the economy stagnated in the fourth quarter and during 2019 it shrank for the first time since 2019. 

Despite the difference in economic performance both central banks recently cut interest rates. The Fed is done in the near term, now on a “wait and see” mode. Banxico is expected to continue with rate cuts; the key rate currently stands at 7.25%, one of the highest among OECD countries. 


FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.