USD/MXN heads for highest weekly close since December 2018
- Mexican peso among worst currency performers of the week, drops almost 3% versus USD.
- USD/MXN rises for the third week in a row, holds above 20.00.
The ongoing sell-off in global equity markets continue to weigh on emerging-markets. Many Latin American currencies reach fresh record lows against the US dollar. The Mexican peso was among the worst performers.
The USD/MXN broke decisively above 20.00 on Friday and jumped to 20.37, the highest intraday level since December 2018. It pulled back later but held above the psychological 20.00 area.
It is trading at 20.16/18 about to post a weekly gain of 70 cents. From mid-February lows it has risen 9%. The dramatic rally could spark some comments from Banxico officials. The Bank of Mexico is expect to cut rates at their next meeting particularly after the emergency cut from the Federal Reserve.
The sharp gains in USD/MXN were also boosted by technical factors. The pair broke a long-term descendant trendline on Thursday at 18.90, adding more strength to the rally.
With USD/MNX above 18.90 more gains seem likely but technical indicators in practically all time-frames show overbought readings but still no signs of a correction. The next long-term resistance is located around at 20.50/60.