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MEXICO: USDMXN Consolidates Break of Last Week’s Lows

MEXICO
  • USDMXN had a clean break of last week’s lows around 18.7750 after the US data on Thursday, as the optimism in equity markets boosted the peso. Additionally, we highlighted the strong rally for MXNJPY which rose close to 2% on the session, a key beneficiary of the higher US yields. This cross extended its recovery from the August lows around 13%, and notably reached the 38.2% retracement point of the May-August selloff around 8.00 which has provided some short-term resistance.
  • There is no domestic data for the remainder of this week’s calendar, so the focus will turn to next week’s retail sales, CPI and GDP data, which represent the latest inputs into the central bank’s reaction function.

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