USD/MXN down 1%, drops to 1-month lows
- The Mexican peso is the best performer of the day.
- Optimist about a potential agreement in NAFTA negotiations boosted MXN.
- USD/MXN gains more than 1%.
The USD/MXN is falling more than 1% on Tuesday. The pair broke a key technical level and extended the slide, reaching the lowest level in a month.
The pair dropped from near 19.00 to 18.77 and at the moment of writing was trading at 18.78, headed toward the lowest close since October 10.
The slide took place amid optimism about NAFTA negotiations. According to Juan Pablo Castanon, head of Mexico’s business chamber, negotiations were near a deal on telecom, energy, and e-commerce. It triggered expectations that a deal might be reached. The fifth round of negotiations that are taking place in Mexico will end today.
The progress in talks boosted the Mexican peso that is the best performer across the globe.
The USD/MNX pair gained more negative momentum from a technical perspective last week after being rejected from levels on top of 19.30. Also it posted a close below 19.00, signaling more potential to the downside. An extension of the slide could find support at 18.70 and below at 18.58.
On the upside, as long as USD/MXN remains below 19.05, the negative tone is likely to prevail. Above the US dollar could recover strength and rise to test, first 19.15, and then 19.30.