Most recent article: Mexican Peso bottoms out as post-election selling eases
The Mexican Peso traded with minuscule losses against the US Dollar on Monday and is down 0.29% as risk appetite deteriorates based on weak China data and political uncertainty in Europe. The emerging market currency would remain volatile as traders digest the incumbent judiciary reform in September, presented by current President Andres Manuel Lopez Obrador and approved by upcoming President Claudia Sheinbaum. The USD/MXN trades at 18.51, gaining 0.34%
The Mexican currency stabilized last week after verbal intervention by Bank of Mexico (Banxico) Governor Victoria Rodriguez Ceja last Wednesday, who said the central bank is attentive to volatility in the Mexican currency exchange rate and could act to restore “order” in markets.
Last week, Claudia Sheinbaum tried to calm investors and told them not to be concerned about the reforms. She said, “Mexico’s economy is healthy and strong, and [there is] nothing to worry about.”
In the meantime, Sheinbaum presented the results of the poll made by ruling party Morena and two independant surveys, which showed citizens approval to the reform.
The economic docket in Mexico will feature the announcement of Aggregate Demand, Private Spending, Retail Sales, and Economic Activity data. The data is expected to show that the economy is slowing down due to higher interest rates set by Banxico at 11%, which are expected to be lowered in the June 27 meeting.
Despite that, the USD/MXN exchange rate continues to be driven by political uncertainty about the changes to the Mexican Constitution that threaten the state of law.
Across the border, the latest Federal Reserve (Fed) decision to keep rates unchanged and the projection of just one interest rate cut in 2024 cushioned the Greenback and boosted the USD/MXN to 14-month highs.
The US economic docket is absent except for Fed officials crossing the newswires. Up next, the Philadelphia Fed’s Patrick Harker will give a speech later on Monday.
The USD/MXN uptrend remains intact, even though it has hovered near 18.50 for the last three trading days. Momentum supports buyers as the Relative Strength Index (RSI) remains bullish after exiting overbought territory. That said, if buyers achieve a daily close above 18.50, that could pave the way for further upside.
Once buyers reclaim 18.50, the next resistance level would be the year-to-date high of 18.99, followed by the March 20, 2023, high of 19.23. A breach of the latter will sponsor an uptick to 19.50, ahead of the psychological 20.00 mark.
Conversely, if sellers push prices below the April 19 high of 18.15, that would keep the exotic pair trading within the 18.00-18.15 range.
The Retail Sales released by INEGI measures the total receipts of retail stores. Monthly percent changues reflect the rate of changes of such sales. Changes in retail sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive or bullish for the Mexican peso, while a low reading is seen as negative or bearish.
Read more.Next release: Thu Jun 20, 2024 12:00
Frequency: Monthly
Consensus: -
Previous: -0.2%
Source:
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