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MEXICO: USDMXN Little Changed Following Post US Data Volatility

MEXICO
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  • Both the firmer CPI and higher-than-expected jobless claims data in the US have provided some volatile price action for the Mexican peso on Thursday. USDMXN has registered roughly a 1% range on the session, with spot trading just in the red as we approach the European close.
  • CIBC have noted that although the ongoing reforms and the uncertainties created by the US presidential election should continue to weigh on the MXN, they expect the 19.60 level to remain a strong resistance level for USD/MXN in the very short term. Above here, we note the first resistance and a key short-term hurdle, is at 19.8295, the Oct 1 high.
  • Interestingly, within the latest Banxico minutes, one member emphasized that, “despite volatility in financial markets in recent months, several metrics indicate an improvement in trading conditions in both debt and foreign exchange markets. He/she argued that, consequently, no deterioration in the functioning of the monetary policy transmission mechanisms is perceived, including the multilateral real exchange rate, which he/she noted is at levels comparable to those observed in 2015.”
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  • Both the firmer CPI and higher-than-expected jobless claims data in the US have provided some volatile price action for the Mexican peso on Thursday. USDMXN has registered roughly a 1% range on the session, with spot trading just in the red as we approach the European close.
  • CIBC have noted that although the ongoing reforms and the uncertainties created by the US presidential election should continue to weigh on the MXN, they expect the 19.60 level to remain a strong resistance level for USD/MXN in the very short term. Above here, we note the first resistance and a key short-term hurdle, is at 19.8295, the Oct 1 high.
  • Interestingly, within the latest Banxico minutes, one member emphasized that, “despite volatility in financial markets in recent months, several metrics indicate an improvement in trading conditions in both debt and foreign exchange markets. He/she argued that, consequently, no deterioration in the functioning of the monetary policy transmission mechanisms is perceived, including the multilateral real exchange rate, which he/she noted is at levels comparable to those observed in 2015.”