USD/MXN: Mexican peso hits highest level in six days at 21.30
- Mexican peso among top performers on Tuesday, amid lower yields.
- USD/MXN breaks under 21.60 and tumbles to 21.27, the lowest since last Wednesday.
The USD/MXN broke under 21.60 and tumbled to 21.27 reaching the lowest level in almost a week. Recently it rebounded rising back above 21.40 and trimmed losses following some hawkish remarks from Fed Chair Powell.
MXN up, but losing strength
The Mexican peso went from oversold to overbought levels in a few days. The USD/MXN is falling sharply however it trimmed losses. A weaker US dollar across the board was the key event, and also a stronger MXN.
During the last hour, Powell at the Senate mentioned that it is time to retire “transitory” as a description of inflation, triggering a decline in Treasuries. The rebound in yields boosted the greenback across the board, sending USD/MXN back above 21.40.
Volatility appears to be set to continue during the next hours. Price moves were also exacerbated prior to Powell’s comments on the back of end-of-month flows.
A recovery above 21.60 would weaken the Mexican peso while a consolidation under 21.45 would keep the 21.30 support area exposed.