USD/MXN: Bearish correction ends around 19.50
- US Dollar rises in Mexico after 5-day
slide, rebounds after hitting weekly lows. - USD/MXN decline capped by the key support area at 19.50.
The Mexican peso lost ground against the US Dollar on Monday, at a moderate pace amid risk aversion, after a 5-day rally.
USD/MXN capped by 19.50
The pair bottomed today at 19.45, the lowest since May 14 and quickly rose back above 19.50. It continued to rise during the American session and peaked at 19.62, then pulled back finding support above 19.55.
As of writing was trading around 19.60, consolidating daily gains. The pair appears to be moving between to relevant levels: 19.50 and 19.70. A break above 19.70, would expose the 20.00. Below 19.50, the next strong supports areas are 19.30 and 19.00.
Between NAFTA, elections
Despite, the recovery of last week, the Mexican peso is still significantly below the level it had a month ago. The combination of a strong US Dollar amid EM jitters, the proximity of the Mexican presidential election and NAFTA uncertainty were the main drivers of the USD/MXN rally. Last week, the pair retreat from 19.95 to 19.50 despite the 8% slide in crude oil prices.
Real, under pressure
Brazilian equities lost more than 3% amid an ongoing truckers' strike that includes blockades of highways. The strike started a week ago and also weigh on the Brazilian real. Among Emerging Market currencies, BRL is the worst performer on Monday. USD/BRL jumped to 3.72, approaching the 2-year high it reached last week at 3.77.