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USDMXN Bounces After Making Fresh Four-Year Low

MEXICO
  • Amid the early continuation of greenback weakness on Thursday, USDMXN briefly breached the key 2020 low of 18.5237 to trade at the lowest level since October 2018. However, the psychological 18.50 mark was enough to contain the pair’s decline, prompting a bounce of roughly one percent throughout Thursday’s US session. A sustained break of 18.50 and 18.4767, the 1.618 projection of the Jul 14 - Sep 12 - Sep 28 price swing, is required to confirm a resumption of the downtrend.
  • In politics, Foreign Affairs Minister Marcelo Ebrard is confident in getting the nomination to fight for the country’s presidency in 2024, even as he faces a fierce battle within the ruling party to succeed AMLO.
  • Data today at 1200GMT/0700ET: January Consumer Confidence, est. 42.8, prior 42.5.
  • Worth noting Banxico’s February meeting take place next week with the decision due on Thursday. As of writing, four analysts have submitted to the Bloomberg survey and all are forecasting a 25bp rate hike to 10.75%.

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