Image Source:
The Mexican Peso registers gains against the Greenback for the second consecutive day after hitting a low of 19.61 in early trading on Thursday. A tranche of economic data in the United States (US) reassured investors that the Federal Reserve (Fed) might lower borrowing costs at the November meeting, a headwind for the US Dollar. Therefore, the USD/MXN trades at 19.38, down 0.38%.The US Bureau of Labor Statistics (BLS) revealed that prices paid by producers came in around estimates, indicating that the disinflation process is evolving. Lately, the University of Michigan (UoM) Consumer Sentiment showed signs of deterioration, while inflation expectations over the next year increased for the first time in five months.The USD/MXN extended its losses as data from the CME FedWatch Tool showed that traders had increased the odds for a 25-basis-point rate cut to 85.9%, while the chances of the Fed keeping rates unchanged are 14.1%.Across the south of the border, the Mexican economic docket revealed that Industrial Production contracted in monthly and annual figures, painting a gloomy economic outlook.The minutes of the Bank of Mexico (Banxico) showed that the economy is undergoing a slowdown, losing some pace since the last quarter of 2023. This, along with the evolution of the disinflation process in Mexico, is one of the two reasons Banxico mentioned that policy needs to be less restrictive.In the meantime, Chicago Fed President Austal Goolsbee crossed the newswires. He said he doesn’t see evidence of the economy overheating and that the central bank should focus on the dual mandate.The US Dollar Index (DXY), which tracks the buck’s value against a basket of six peers, is virtually unchanged at 102.84, capping the USD/MXN advance on Friday.
Daily digest market movers: Mexican Peso bolstered due to soft US data
USD/MXN technical outlook: Mexican Peso counter attacks as USD/MXN falls below 19.35
The USD/MXN uptrend remains in place, but it could consolidate within the 19.00-19.50 area. Momentum shows that sellers remain in charge as the Relative Strength Index (RSI) depicts.In that outcome, if USD/MXN drops below the October 4 wing low of 19.10, the 19.00 figure will be exposed. Once broken, the next support would be the 100-day SMA at 18.64.Conversely, if buyers stepped in and pushed the exchange rate above 19.50, this could pave the way for testing the October 1 daily high of 19.82, ahead of 20.00. Up next would be the YTD peak of 20.22.More By This Author:Silver Price Forecast: XAG/USD Creeps Lower And Stays Above $30.00 Gold Slides As US Yields Rise, Middle East Conflict Eases Gold Struggles As US Yields Rise, Big Rate Cut Hopes Wane
