The Mexican Peso extended its gains on Wednesday after US economic data showed that November inflation was aligned with estimates, cementing the case for an interest rate cut by the Federal Reserve (Fed).
Mexican Peso appreciates as US November inflation data meets estimates, favoring Fed’s easing. Mexico’s inflation continues to edge lower, enhancing prospects for a bigger Banxico rate cut. Investors anticipate a 25 bps rate cut by the Federal Reserve on December 18 with odds standing at 92%. The Mexican Peso extended its gains on Wednesday after US economic data showed that November inflation was aligned with estimates, cementing the case for an interest rate cut by the Federal Reserve .
Momentum, as measured by the Relative Strength Index , suggests that sellers are in charge. This means that further USD/MXN downside is expected. If USD/MXN drops below the 50-day SMA, the next support would be 20.00. A breach of the latter will expose the 100-day SMA at 19.66, followed by the psychological 19.50 figure. Once surpassed, the next stop would be the 19.00 mark. Conversely, if USD/MXN soars above the December 6 high of 20.28, that could pave the way to challenge 20.
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