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Greenback Strength, Declining Risk Sentiment Weigh on Peso

MXN
The Mexican peso has come under some early pressure as greenback strength following a surge in volumes as US investors return to markets weigh on the local currency, and indeed the wider EM FX basket. Declining sentiment, evidenced by the break lower in European stocks and higher US yields, has also aided the sustained uptick in the USD index through the European Open, though domestic drivers have been limited so far. Attention turns to an appearance from Fed Governor Waller as the highlight on the NY docket (ahead of the pre-FOMC blackout, which goes into force this weekend).
  • USDMXN has pierced above the 17.00 handle in recent trade, up 0.85% on the day, placing the pair within close proximity to last Thursday's highs at 17.0681. However, a break of firm resistance further out, at 17.1692 where the 50-day EMA intersects today, would be needed to signal a reversal of the bearish theme that has been dominating since early December with gains so far considered technically corrective.

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