USD/MXN clocks three-day high

Broad based USD rally following the Fed’s hawkish surprise, pushed the Mexican Peso to a three-day low.

The USD/MXN pair clocked a session high of 20.483. A minor dip to 20.178 was quickly undone after the Fed’s dot plot revealed the policy makers see three rate hikes in 2017 as opposed to the previous forecast of 2 rate hikes.

Furthermore, Yellen sounded upbeat about the inflation and labour market and not once mention downside risks to the economy or data dependency.

Dovish Fed was the last hope for Peso bulls, given the President Elect Trump, who has promised to build a wall at the Mexican border, is set to enter the White House in January.

USD/MXN Technical Levels

A break above 20.50 (zero figure) would open the door to 20.5973 (Dec 6 high) and then to 20.8725 (Dec 1 high). On the lower side, breach of support at 20.32 (5-DMA) would expose 20.1416 (Dec 12 low) and 20.00 (zero figure).