USD/MXN tumbles toward 19.05 on Fed and Navarro’s comments

The Mexican peso rose sharply against the US dollar yesterday and today extended gains. USD/MXN reached at 19.04, the lowest level since the US presidential elections. 

The pair then bounced modestly to the upside and it was trading at 19.12/14, 2.50% below the level it had 24 hours ago. 

From a technical perspective, the decline accelerated after breaking the 19.40/45 barrier. The next strong support now is located at 19.00. On the opposite direction, resistance levels now are seen at 19.40 and above here at the 20-day moving average at 19.75/80, where also a downtrend line stands. 

Fed and Navarro

Yesterday the US dollar tumbled across the board after the decision of the Federal Reserve to raise interest rates. The decision was expected but the tone of Janet Yellen during the press conference and the update projections from FOMC members weakened the greenback. 

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Also on Wednesday, comments from Peter Navarro, the Director of the White House National Trade Council, pushed the Mexican peso to the upside. He said that the US is seeking to form an alliance with Canada and Mexico, to form a regional manufacturing “powerhouse”. The better tone of Trump’s cabinet toward Mexico has helped the peso during the last month.