The mexican peso continues to trade sideways in the short term, close to the maximum of 2017 against the us dollar. A month ago, the pair USD/MXN began to move in the current range, between 17.60 and 17.97.
The potential negative impact of the earthquake and the stresses in the negotiations for the NAFTA were offset by a rise in crude oil prices and optimistic expectations of economic performance in the country of Mexico in the short term.
Fed and Banxico
Within a week, the Federal Reserve will announce its decision on monetary policy. Expect No changes in the rates and some analysts estimate that there could be some decision with respect to the process of normalization of the balance sheet.
If the Fed stays on hold, the central bank could do the same on the 28th of September, when it convenes its Board. At the last meeting, the mexican central bank held rates unchanged, ending a long cycle of adjustment. Since then inflation increased and the weight remained stable. Policy makers projected that inflation is near its peak and will start to fall in the short term, so that they do not see the need to keep rates on the rise, for the moment.
Levels of USD/MXN
The key level to the topside is seen in the area of psychological 18.00 that offers resistance since July. A consolidation at the top, it would open the door for a bullish correction of the US dollar On the downside, the key support is the area of 17.45/50, near the minimum of 2017. A break lower would expose the level 17.00/10. In the short term, 17.60 has become a strong support, protecting the area 17.45 50.