April 23, 2024 15:19 GMT
Mexican Peso Leads LatAm Charge, USDMXN Back Below 17.00
MXN
- The renewed sensitivity to moves in US yields and broader risk sentiment in recent sessions has bolstered the Mexican peso on Tuesday. Today’s collection of lower-than-expected US PMIs has been met with broad greenback pressure and recovering equities are underpinning the relative MXN outperformance in the region.
- USDMXN (-0.85%) has slipped back below the 17.00 handle, briefly printing a low of 16.9717. Some analysts have highlighted that last week’s significant volatility for MXN may have cleaned out short-term positioning for a potential return lower. Indeed, HSBC highlighted they would not be giving up on bullish LatAm FX bets.
- Furthermore, USDMXN’s inability to close back above 17.3860 could be a bearish development. The Jan 17 high is an important reversal trigger. On the downside, initial support moves up to 16.7857, the 20-day EMA.
- Attention going forward will be on tomorrow’s bi-weekly CPI inflation data, ahead of the May 09 Banxico meeting where the most recent rhetoric suggests a rate pause is the most likely outcome.
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