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USD/MXN: Mexican Peso's Momentum Fades as Global Growth Concerns Mount

USD/MXN: Mexican Peso's Momentum Fades as Global Growth Concerns Mount
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  1. USD/MXN

    USD/MXN

    The Mexican peso is one of top-performing currencies of the year and that trade is starting to lose momentum.  The interest rate differential (Banxico overnight rate stands at 11.25%) and robust economic growth prospects have made the peso a very attractive trade this year. A weakening global growth outlook however will start to dampen prospects for EM currencies.  Emerging markets need their key trading partners to thrive and China’s disappointing economic recovery is triggering some profit-taking.

    USD/MXN has major support at the 17.00 level and if a rebound emerges, upside could target the 50-day SMA around the 17.45 level.  Given the softening outlook for the next year, peso weakness to the dollar could eventually target the 20.00 level.

     

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    Ed Moya

    Ed Moya

    With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.


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