USD/MXN jumps to highest in almost 4 months after vote to cancel new airport

• Mexican peso tumbles more than 2% against US dollar, worst performer of the day.
• USD/MXN off highs but still with significant bullish pressure.  
• Vote on new airport in Mexico City hits MXN. President-elect Andrés Manuel López Obrador press conference expected.  

The Mexican peso tumbled on Monday following a referendum pushed by President-elect Andrés Manuel López Obrador regarding the new airport, already under construction. The results of the “public consultation” were against the new airport.  

The vote isn’t legally binding, but AMLO said he would abide by the results. He is expected to deliver a press conference today. The cancellation of the airport under construction could have a large impact on investors confidence, warned many analysts. The President-elect will take office December 1 and if he cancels the project, significant financial implications are likely.  

USD/MXN could test 20.00

The sharp depreciation of the Mexican peso boosted USD/MXN to 19.83, the highest level since July. From the top pulled back modestly and as of writing was trading at 19.70, up more than 2% for the day. On Friday, the pair tested 19.30.  

Despite moving off highs during the last hour, the bullish pressure remains intact. A consolidation on top of 19.60/65 would leave the doors open to further gains and a potential test of the next strong barrier seen at 19.95/20.00.  On the downside, immediate support could be located at 19.60/65, followed by 19.45 and 19.20 (horizontal level and 20-day moving average).