Watching USDMXN after Banxico's recent tone – any shifts in your thinking?

asked by u/lan_goh · 24d · 3 answers

It's been interesting to watch the price action on $USDMXN lately. We've seen a bit of a pullback today, with it trading around 17.135 after hitting a low of 17.116. My eyes are on how Banxico's recent commentary is going to play out. They've maintained a pretty hawkish stance, even as other central banks are starting to hint at pivots. This divergence is the key for me.

Are others seeing this as a setup for continued MXN strength, or do you think the market might be getting a little ahead of itself, especially if the Fed maintains its own higher-for-longer narrative? I'm curious if anyone's adjusted their levels for $USDMXN based on this. I'm keeping a close watch on the 17.10 level for potential support breaking, but also eyeing any signs of the USD finding a renewed bid if the market recalibrates its Fed expectations. Always a dance between two strong narratives.

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Top answers

  • u/iahmed· 12 pts· 24d

    Definitely agree the Banxico divergence is the critical factor here. I'm curious if you're seeing any specific price levels on USDMXN that you think would confirm or deny the impact of their hawkishness?

  • u/lucia.weber· 1 pts· 24d

    I'm right there with you on Banxico's stance being key. It's a tricky one to predict how long they can hold out if other major central banks do start to ease up. Are you looking at any specific economic data points in Mexico that might sway their decision?

  • u/riku.kang· 0 pts· 24d

    I'm certainly watching Banxico closely. While their hawkish tone is clear, the market's reaction to global risk sentiment often overrides local central bank guidance in the short term. It'll be interesting to see if this pullback has legs or if it's just a consolidation before further USD strength. Do you have a specific resistance level in mind you're watching?

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