- Mexican peso losses strength and pulls back.
- US Dollar rises after FOMC minutes.
- Next: Banxico minutes and Mexican inflation data
The USD/MNX pair moved sideways above the 19.15 during the US session and as of writing trades near daily highs at 19.21. It moved higher after the release of the FOMC minutes that were seen as not so dovish. It remains limited around 19.20 that continues to offer some resistance.
According to analysts at Westpac, the minutes elaborated further on the message that the Fed is on hold while the economic outlook is uncertain. Overall they see “this is perhaps less dovish than markets had were positioned for.” The greenback strengthened across the board and rose moderately.
The Mexican peso was among the worst performers on Wednesday, but with modest losses. The greenback rose sharply versus the Argentinean peso (+1%) and the Turkish Lira (+0.75%). USD/MXN is trading at 19.210, up 0.37% for the day. On Thursday, the minutes from the Bank of Mexico will be released and on Friday, Mexican inflation data.
USD/MXN Key Levels
The short-term chart still favors the downside. If the pair manages to rise further to the upside above 19.20, the MXN will lose momentum. Above 19.30 the pair could gain support for further gains.
While unable to sustain on top of 19.20 the outlook will continue to favor the downside. Below the support at 19.15 (also the 20-day moving average), the USD/MXN is likely to test 19.00/05: a close under that area would point to a test of 2019 lows at 18.87/85.
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