USD/MXN Rises to a Four and a Half Week High of 17.35
Yesterday, the USD/MXN pair started trading around 17.18, but it has been gaining ground throughout the day. As the market remains uncertain, the Dollar is benefiting and pushing the pair higher. During the American session, it reached a new high of 17.35, marking its strongest level since August 4.
The Dollar’s strength is not limited to the USD/MXN pair. The Dollar Index (DXY), which measures the strength of the Dollar against a basket of major currencies, has soared to a six-month high near 105.00. The ongoing economic stagnation in countries like China and Germany has fueled risk aversion, causing investors to seek the safety of the Dollar.
While the Dollar is shining, the US factory orders data released today showed a decline of 2.1% in July, worsening the estimated 0.1% drop. This is the first decrease in factory orders in five months. On the other hand, consumer confidence in Mexico has reached its highest level since 2019, with the index rising to 46.7.
Looking ahead, tomorrow will bring the release of the US ISM Services PMI, which could create volatility in the Dollar. Additionally, the Fed’s Beige Book will provide insights into the economic conditions in the US. In Mexico, inflation data for August will be published on Thursday, attracting attention from investors.
Currently, the USD/MXN pair is trading above 17.33, representing a daily gain of 0.94%. If the pair breaches today’s high of 17.35, it could lead to further upside momentum. The next resistance level to watch is at 17.42. On the downside, a clear break of the psychological level of 17.00 could accelerate the decline towards the support levels at 16.70/68 and even to the nearly eight-year low of 16.62.
Overall, as the market tone remains uncertain, the USD/MXN pair continues to rise, while the Dollar Index reaches new highs. The upcoming economic data and events will likely impact the pair’s movement in the coming days.