Back
8 Mar 2013
Forex: USD/MXN in weekly lows despite rate cut
The Mexican peso is sharply appreciating against the greenback on Friday, despite the 50 bps rate cut by the Banxico (Mexico’s central bank), against the market consensus that was biased towards the ‘on-hold’ stance.
After the initial albeit short-lived spike to levels shy of 12.8000, the cross rapidly reverted that trend and started a deep correction, currently around 12.6500
The research team at TD Securities concluded, “… the market has immediately looked through this cut, apparently focusing on the fact that uncertainties have been removed. So, USD/MXN has quickly recovered its downside momentum, underpinned by the positive US payroll and unemployment data earlier today, of which Mexico is the biggest beneficiary among major Ems”.
The pair is now retreating 0.80% at 12.6553 and a dip beyond 12.6500 (low Feb.25) would aim for 12.6380 (Lower Bollinger).
On the upside, the initial hurdle lies at 12.8247 (Upper Bollinger) ahead of 12.8480 (MA100d) and then 12.9016 (high Feb.26).
After the initial albeit short-lived spike to levels shy of 12.8000, the cross rapidly reverted that trend and started a deep correction, currently around 12.6500
The research team at TD Securities concluded, “… the market has immediately looked through this cut, apparently focusing on the fact that uncertainties have been removed. So, USD/MXN has quickly recovered its downside momentum, underpinned by the positive US payroll and unemployment data earlier today, of which Mexico is the biggest beneficiary among major Ems”.
The pair is now retreating 0.80% at 12.6553 and a dip beyond 12.6500 (low Feb.25) would aim for 12.6380 (Lower Bollinger).
On the upside, the initial hurdle lies at 12.8247 (Upper Bollinger) ahead of 12.8480 (MA100d) and then 12.9016 (high Feb.26).