USD/MXN Drops to Lowest Price Since October 3
The USD/MXN pair has hit its lowest price since October 3, dropping below 18.00 late on Tuesday. Although it managed to stay above 17.90 during Wednesday’s Asian session, it fell to eight-day lows at 17.78 after the release of US producer prices. This decline in the dollar can be attributed to the loss of risk appetite in the markets and the higher-than-expected increase in US producer prices.
The Dollar Index (DXY) has fallen for the sixth consecutive day and reached a 16-day low of 105.55 on October 11. The decline in the dollar was further fueled by the publication of US production prices for September, which showed a year-on-year increase of 2.2%, surpassing the estimated 1.6% rise. Traders are also closely watching the conflict between Israel and Hamas and anticipate the release of the September Fed Minutes, which could provide insights into future rate increases.
Tomorrow’s focus will be on US inflation figures for September, which are expected to moderate annually to 3.6% from 3.7% in August. Additionally, Mexico will release its industrial production figures for August, with a projected growth of 4.9% compared to the previous month’s 4.8%.
Regarding the price levels for USD/MXN, the first major support is seen at 17.60, the floor of October 3. If the pair continues to decline, the next target is around 17.35, the level of September 29. A break below this zone could indicate a move towards the 16.99/17.00 floor of September 20. On the other hand, if the pair recovers, the resistance level to beat will be today’s maximum at 18.30 before heading towards the ceiling of October 6 at 18.49/50.
Overall, the dollar’s downward momentum, along with various economic factors and geopolitical events, will continue to influence the USD/MXN pair in the coming days.