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USDMXN Pierces Above 18.50 As Post-Election Rally Extends

MEXICO
  • The Mexican peso came under renewed pressure Friday afternoon following comments from President AMLO that those who oppose constitutional change favour corruption. With the greenback also being supported following the US jobs data, USDMXN soared back above 18.00 and then breached resistance at 18.2137, the Apr 19 high.
  • This takes the post-election bounce to roughly 9% and despite attempts from officials to calm concerns, price has briefly pierced above the October 2023 highs to print 18.5030 overnight, the highest level since March 2023.
  • 18.7976 is the next resistance point before a cluster of medium-term highs around 19.20 mark significant peso support.
  • JPMorgan have noted that with MXN starting to turn more volatile and depreciating faster than they expected, the effect on core goods inflation could be a thorn on Banxico’s side sooner rather than later – if such an adjustment in the market proves to be persistent.

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