Mexican Peso (USD/MXN) Price, Chart and Analysis.
USD/MXN Spikes to a Multi-Decade High
The Mexican Peso fell to its lowest level in decades against the US dollar on Monday after oil prices slumped by 30%. Mexico, the seventh largest producer of oil, felt the full effects of the decision by Saudi Arabia to cut prices and ramp up oil production over the weekend, after last week’s OPEC meeting failed to agree on additional output cuts. Oil tried to bounce off its multi-year lows on Tuesday, but the move was weak, leading to fears of further falls. The ongoing spread of the coronavirus continues to weigh on global economic growth, and the demand for oil, and while this situation persists, the Mexican Peso will remain under downward pressure.
The daily chart shows that USD/MXN hit a spike high of 22.11 on Monday, the highest level the pair have traded at in decades. The subsequent sell-off saw the pair trade back below 21.00. The break higher has broken a series of lower highs, suggesting that the longer-term sell-off in the pair has finished. The Mexican Peso has long been a favored carry-currency, but with further Mexican interest rates now fully priced-in the market, this advantage is eroding sharply. Volatility in the pair, measured by the ATR indicator, is back at levels last seen in late-December 2018. All three moving averages have turned higher suggesting growing bullish momentum.
Traders should treat USD/MXN with caution as this week’s price range, currently between 20.30 and 22.11, leaves the pair open to further wild swings on any oil news and rumor. In addition, the US dollar continues to pick-up from its recent lows, boosting USD/MXN positive momentum.
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USD/MXN Daily Price Chart (April 2019 – March 11, 2020)
What is your view on the Mexican Peso – bullish or bearish?? You can let us know via the form at the end of this piece or via Twitter @nickcawley1.