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  • USD/MXN surges to a one-week high.
  • Fitch downgrades Mexico to BBB-, outlook stable.
  • US Dollar remains on the front foot amid broad risk aversion.

Early Thursday morning in Asia, global rating giant Fitch downgrades Mexico’s credit rating to BBB- with a stable outlook.

Following the news, the USD/MXN pair surged from 23.95 to 24.30, currently around 24.23, while also probing the weekly top.

Also contributing to the pair’s strength could be the US dollar’s strength amid a broad risk-off wave mainly driven by the rise in the coronavirus (COVID-19) fatalities, downbeat US data and fears of the global recession.

While portraying the risk-off, Wall Street closed in red and the US 10-year Treasury yields dropped 11 basis points to 0.635% by the end of Wednesday in the US markets.

Moving on, traders will keep eyes on the US economic docket and the virus updates for fresh impetus while oil catalysts will also have their effects on the pair.

USD/MXN forecasts chart

Following its break of 200-HMA, USD/MXN is currently rising towards 24.80. It’s worth mentioning that sellers will look for entry below 23.80.

Trend: Further recovery expected