The price of the Dollar rebounds to the day’s highs near 18.25 against the Mexican Peso after the good data from the US PMI.

• The USD/MXN manages to recover on Tuesday after falling to six-day lows on Monday.
• The price of the Dollar reaches new highs of the day near 106.30.
• The US manufacturing and services PMI data improves expectations in the preliminary reading for October.

He USD/MXN fell in the American session on Monday to 18.07, a six-day low. Today, Tuesday, the pair touched that region at the beginning of the European morning but managed to recover ground after the opening of Wall Street, driven by the good data from the United States PMI. The Dollar has risen against the Mexican Peso to 18.24, a new daily ceiling.

The price of the Dollar regains its strength driven by optimism in US data

He Dollar Index (DXY) fell to one-month lows of 105.35 during the early hours of Tuesday, affected by the rise in US 10-year Treasury yields above the 5% threshold. Yields subsequently returned below 5%, causing the USD to gain traction again. The release of US services and manufacturing PMI data gave an additional boost to the Dollar, lifting the DXY to 106.25, the day’s high.

The US Manufacturing PMI rose to 50 points in the preliminary reading for October, better than the 49.5 expected, while the Services PMI rose to 50.98 from the previous 50.1, beating the 49.9 estimate.

For its part, Mexico yesterday published its Global Indicator of Economic Activity (IGAE), which showed that the productive activity expanded 3.5% annually in August, above the 3.4% expected a few days before by the Mexican National Institute of Statistics and Geography (INEGI). h

Today, INEGI has published its National Consumer Price Index (INPC). According to the statement, in the first half of October 2023, the INPC had a variation of 0.24% compared to the previous fortnight, below the estimated 0.34%. With this result, annual general inflation stood at 4.27%. In the same fortnight of 2022, biweekly inflation was 0.44% and annual inflation was 8.53%.

USD/MXN Price Levels

With the USD/MXN operating at the time of writing above 18.19, gaining 0.21% daily, in an area located between 18.46/18.49 stands as main resistance, as it contains the October highs recorded on October 20 and October 6, respectively. Higher up I would expect the barrier located at the psychological level of 19.00.

On the downside, the first support appears in the psychological zone of 18.00. A break below this region could cause a decline towards 17.75, the weekly low of October 12. Further down awaits the October minimum recorded on the 3rd at 17.60.