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MEXICO: USDMXN Rises Back Above 20.00, August Retail Sales Due

MEXICO
EM BulletMexicoBulletGlobalEmerging Market NewsRegion
  • The ongoing upward pressure on US treasury yields and associated dollar strength continues to underpin the bullish theme in USDMXN, which is bolstered by concerns over the US election and domestic issues related to constitutional reforms.
  • While broader global themes continue to be the dominant driver, yesterday’s weaker-than-expected economic activity data may renew concerns over the growth outlook. BBVA believe that yesterday’s figures support their view that Mexico’s growth dynamics remain heterogeneous and should ensure Banxico continues to cut the policy rate by 25bp in its upcoming meetings.
  • USDMXN is trading close to its latest highs and attention is on the key resistance and bull trigger at 20.2181, the Aug 5 high. Clearance of this hurdle would resume the uptrend and open 20.4578, the 1.764 projection of the Sep 18 - Oct 1 - Oct 4 price swing. The 20-day EMA is at 19.6715 and marks first support.
  • Finance Ministry officials visit Washington D.C. for meetings with IMF authorities during the fund’s week of annual meetings. On today’s data calendar, retail sales data for August is scheduled today, expected to decline 0.2% on an annual basis.
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  • The ongoing upward pressure on US treasury yields and associated dollar strength continues to underpin the bullish theme in USDMXN, which is bolstered by concerns over the US election and domestic issues related to constitutional reforms.
  • While broader global themes continue to be the dominant driver, yesterday’s weaker-than-expected economic activity data may renew concerns over the growth outlook. BBVA believe that yesterday’s figures support their view that Mexico’s growth dynamics remain heterogeneous and should ensure Banxico continues to cut the policy rate by 25bp in its upcoming meetings.
  • USDMXN is trading close to its latest highs and attention is on the key resistance and bull trigger at 20.2181, the Aug 5 high. Clearance of this hurdle would resume the uptrend and open 20.4578, the 1.764 projection of the Sep 18 - Oct 1 - Oct 4 price swing. The 20-day EMA is at 19.6715 and marks first support.
  • Finance Ministry officials visit Washington D.C. for meetings with IMF authorities during the fund’s week of annual meetings. On today’s data calendar, retail sales data for August is scheduled today, expected to decline 0.2% on an annual basis.