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MXN Outperforming After Better-Than-Expected Economic Activity

MEXICO
  • With the odds of a Trump presidency reducing marginally following President Biden's withdrawal from the presidential race, USDMXN (-0.65%) has been edging lower today, dipping back below the 18.00 level and piercing the 20-day EMA, intersecting today at 17.9407.
  • As noted previously, multiple analysts have highlighted sub 18.00 levels as attractive for dip buyers, given the domestic political uncertainty that lingers around the upcoming Sheinbaum administration. Important support for the pair lies at 17.7672, the 50-day EMA. A clear break of this average would undermine the bullish theme for USDMXN.
  • May economic activity beat expectations earlier, but retail sales disappointed. Attention turns to mid-month CPI data for the first half of July on Wednesday. The next Banxico decision falls on August 08.

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