USD/MXN drops to 2-week lows

The Mexican peso continues to rise against the US dollar reversing the trend of the previous weeks. USD/MXN  reached on Monday the lowest level in two weeks at 18.54 and is was trading at 18.57, 2.30% below last week highs. The improvement in risk appetite and the recovery in crude oil prices help the Mexican peso.

A month ago USD/MXN started to rise and last week it reached the 19.00 area but it failed to break higher and weakened. On Friday after the NFP it started to correct lower and today it accelerated after breaking below 18.70.

Momentums now favor the downside in the USD/MXN. If the price rises back above 18.70 Greenback could gain momentum but the upside would remain limited as long as the US dollar remains unable to break the 19.00 zone.

From a fundamental perspective, US economic calendar seems light for the next days. The next relevance report will be released on Friday, with retail sales and producer inflation. In Mexico, inflation data will be released tomorrow and on Thursday the central bank will hold its monetary policy meeting (no change in rates is expected).