USD/MXN consolidates below 19.65

The Mexican peso is rising modestly against the US dollar on Monday and remains near the highest levels since November. 

Last week, USD/MXN peaked at 19.89 but retreated on Friday, ending the week, practically unchanged at 19.60. The decline of the US dollar that followed the release of the NFP report, pushed the pair to the downside, despite the sharp slide in crude oil prices. The WTI today is rising modeslty, after losing more than 8% last week. 

USD/MNX is moving between 19.65 and 19.53. Below 19.50, the key support is seen at 19.43/45 (March 6 & 7 low). On the opposite direction, 19.90 (20-day moving average) is a relevant resistance and a close significantly above could open the doors to more gains. 

FOCM on Wednesday, then Banxico

The most relevant event of the week is likely to be the FOMC decision on Wednesday. Market consensus point to a 25bp rate hike from the Fed. Traders will also look into staff projection and Yellen’s press conference. 

In Mexico, the important report will be on Tuesday, with industrial production. The next decision of the Bank of Mexico (Banxico) will be on March 30. “The bank would probably like to put the tightening cycle on hold, but Fed rate hikes and potential global fallout may prevent this.  Much will depend on external developments”, said analysts from Brown Brothers Harriman.