- USD/MXN rebounds strongly after US CPI
- The US Dollar Index (DXY) partially regains ground after falling to two-day lows of 103.48.
- US inflation moderated to 3.1% annually in November, as expected.
- Mexico’s industrial production is growing at its fastest rate since August 2021.
The USD/MXN recorded a strong rebound with the release of US inflation data. First it fell to 17.29, a three-day low, and then shot up to 17.44, a new daily ceiling. After the rally, the pair fell back to the low zone and is now trading around 17.32, losing 0.43% so far this Tuesday.
The price of the Dollar partially recovers after falling with the publication of US inflation
He Dollar Index (DXY) It began the day on Tuesday trading above 104.00, but during the European session it lost strength until falling to 103.48 after the publication of the United States CPI, which was in line with expectations. The greenback, however, bounced higher minutes later, retesting the daily high of the Asian session at 104.08. At mid-American session, the DXY is trading above 103.85, down 0.21% on the day.
He United States Consumer Price Index (CPI) moderated to 3.1% annually in November from the previous 3.2%, as expected, its lowest level in five months. Meanwhile, core inflation remained unchanged at 4%. For its part, the Mexico’s industrial production grew 5.5% annually in October, exceeding the estimated 4.6% increase. This is the largest increase recorded by the indicator since August 2021.
The pair’s traders now await the two big events of the week that could generate high volatility in the USD/MXN. First of all, the US Federal Reserve will publish its monetary policy decision tomorrow along with the projections and the dot plot. Any clue about the start of rate cuts in 2024 by the Fed can move the Dollar. The turn of Banxico will arrive on Thursdayexpected to maintain interest rates at 11.25% for the sixth consecutive meeting.
USD/MXN Price Levels
A clear break of the USD/MXN below the 17.30/17.29 support zone, where the lows of December 8 and 12 are, will point towards 17.16, the December floor recorded on the 1st of this month. A break of this level would point towards 17.03, the lowest level reached by the pair in the month of November (day 27).
Should the price of the Dollar gain momentum against the Mexican Peso, it will find strong resistance in the region between 17.50 and 17.56, where a psychological level and several highs recorded last week are located. Above this zone, the pair will aim for the round 18.00 level.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
