USD / MXN Forecast: Karune
USD/ MXN has remained relatively stable from where I left it last week, with some attempts to break into the red and a limited rate of rise. Even after NFP data came stronger than expected and the Dollar took some offers, the pair has seen one of the more stable weeks in the last two months.
It could now be a sign of a stable relocation and balance of power, or investors may have lost interest in the USD / MXN altogether this week. Looking at the volume data, this seems to be the first case. This would not be the first couple to be blurred by indecision after a few relatively fast weeks, so the question is now where are we going from here.
This strong employment reading seen on Friday is the last piece of the Fedi policy riddle that has been at work for a long time. As inflation had for some time now reached the conditions needed to become less resilient, it was simply a case where the labor market had shown the same success and had been resilient for a few months now. Now that more than 800,000 jobs have been added in July, I expect the markets to become more likely The Fed announces the curtailment at the Jackson Hole Symposium at the end of this month US dollar growing bullish next to it. If they do not, it will be a great disappointment and a blow to the dollar.
On the laundry side, Banxico will hold an August interest rate decision-making meeting on Thursday. Market expectations have risen that the bank would raise the key interest rate by 0.25 basis points to 4.5%, which would be a steady rise after rising 0.25 basis points to 4.25% in June. If so, it would likely raise the peso slightly and make the Mexican currency more attractive to investors seeking commercial advantages. The US CPI and PPI data there is also something to watch for next week as it may move the dollar and make the USD / MXN more volatile.
USD / MXN daily schedule
Despite Wednesday’s rise, the USD / MXN is limited to 20 pesos, which is a good sign that sellers are firmly back. This is also an area where 20, 50 and 100 days of SEA are converging, making it even more important for future resistance. If it continues this week, sellers are looking for a break below 19.80 to further boost the momentum as the stochastic oscillator begins to show overbought conditions.
– Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin