Back
6 Sep 2013
USD/MXN in weekly lows despite Banxico
FXstreet.com (Edinburgh) -The USD continues to grind lower on Friday, dragging the USD/MXN to fresh weekly lows around 13.2000 despite the rate cut by the Banxico.
USD/MXN hurt by data
Disappointing data from the US labour market are weighing heavily amongst traders, neutralizing the surprising 25 bp rate cut by the Mexican central bank, Banxico. In the same direction, better tone from the EM space is also giving support to the Mexican peso. Marcin Budkiewicz, Strategist at TD Securities, assessed, “we continue to think that 3.75% is as low as Banxico will reduce rates in the current cycle, and economic recovery together with upside risks to inflation may push them to hike later in 2014… Having revised our FX forecasts recently, we remain positive on MXN outlook, with gains in the coming quarters materializing on economic reforms. However, the FOMC announcement presents a risk in September, and with lower rates, MXN may show slightly more weakness in the coming weeks.”
USD/MXN support/resistance levels
As of writing the pair is retreating 1.37% at 13.2068 and a break below 13.1680 (low Sep.6) would expose 13.0910 (MA21d) and finally 12.9300 (low Aug.23). On the upside, the initial hurdle aligns at 13.4200 (high Sep.5) ahead of 13.4607 (high Jun.20) and then 13.4780 (high Aug.2 2012).
USD/MXN hurt by data
Disappointing data from the US labour market are weighing heavily amongst traders, neutralizing the surprising 25 bp rate cut by the Mexican central bank, Banxico. In the same direction, better tone from the EM space is also giving support to the Mexican peso. Marcin Budkiewicz, Strategist at TD Securities, assessed, “we continue to think that 3.75% is as low as Banxico will reduce rates in the current cycle, and economic recovery together with upside risks to inflation may push them to hike later in 2014… Having revised our FX forecasts recently, we remain positive on MXN outlook, with gains in the coming quarters materializing on economic reforms. However, the FOMC announcement presents a risk in September, and with lower rates, MXN may show slightly more weakness in the coming weeks.”
USD/MXN support/resistance levels
As of writing the pair is retreating 1.37% at 13.2068 and a break below 13.1680 (low Sep.6) would expose 13.0910 (MA21d) and finally 12.9300 (low Aug.23). On the upside, the initial hurdle aligns at 13.4200 (high Sep.5) ahead of 13.4607 (high Jun.20) and then 13.4780 (high Aug.2 2012).