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USDMXN Prints Lowest Level Since 2015, Unemployment & Trade Data Due

MEXICO
  • A downward bias continues to dominate for USDMXN, with spot briefly trading at the lowest level since 2015 in early Wednesday trade. The recent break of key support at 16.7852, Jan 8 low, confirmed a resumption of the downtrend and further weakness below 16.6262 (July 2023 low) would open 16.4218, the 1.236 projection of the Dec 5 - Jan 8 - Jan 17 price swing.
  • Initial easing from the central bank has not weighed on the MXN, as many analysts had expected given the room for carry compression without a negative impact on the currency. Furthermore, the low vol environment remains supportive for high carry FX, local fundamentals remain solid and election risk premium remains low. On the upside, initial firm resistance moves down to 16.9349, the 50-day EMA.
  • Mexico will sell three series of floating bonds in a debt auction starting at 1205GMT/0805ET. Economic data includes February unemployment and trade balance figures:
    • Feb. Trade Balance, est. -1.63b, prior -4.31b
    • Feb. Unemployment Rate NSA, est. 2.80%, prior 2.85%

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