The Mexican Peso skyrocketed against the US Dollar on Wednesday after data from the United States (US) fueled speculation that the Federal Reserve (Fed) might cut interest rates more aggressively than expected.
Mexican Peso is buoyed, sponsored by weak US data and cautious comments from Chair Powell. Banxico Deputy Governor Heath mirrors Powell’s caution, advocating for clearer signs of benign inflation before rate cuts. Disappointing US private hiring, rising unemployment claims, sharp drop in ISM Services PMI pressure Greenback.
Although momentum remains bullish, as depicted by the Relative Strength Index , buyers had lost traction while sellers continued to gain steam. If USD/MXN drops further, the next target is the psychological level of 18.00. Breaking below this level would expose the next support at the December 5 high, which turned support at 17.56. Further decline aims for the 50-day Simple Moving Average at 17.37. Conversely, if buyers push the spot price above 18.
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