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Pressure on Peso Sustained Despite More Moderate Greenback Showing

MXN
  • USDMXN continues to trade with an upward bias, up 0.55% on the day in early trade. The pair rallied ~2% yesterday, driven by the risk-off tone across global markets and sustained uptick in the USD index throughout the session.
  • Today’s gains come despite a more muted showing of the greenback, with EURUSD marginally in the green at typing, and further pushback from officials of major central bank over the prospect of early rate cuts. Nevertheless, the EM FX basket continues to face pressure, with the Mexican peso a notable underperformer in the space.
  • Today, USDMXN continues to trade above the 50-day EMA, which intersects at 17.1825. A more sustained break of this average is needed to signal a reversal of the technical bearish theme that has been dominating since early December. The December highs, at 17.5698, will be the next target for bulls.

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