USD/MXN approaches 18.00, hits highest since July 11

The Mexican peso is falling against the US dollar for the third day in a row and the fifth time out of the last six trading days. The greenback continues to recover ground after falling during July to the lowest in 14 months. 

Last week, USD/MXN finished at 17.84, posting the third consecutive weekly gain, supported by a stronger US dollar across the board. Still, the pair is sharply lower so far during 2017, down 13%. In July posted the third monthly loss in a row, first time to do since 2012. 

Eyes on 18.00

Today the pair continued to move toward 18.00. It peaked at 17.98, the strongest since July 11 and then pulled back modestly. Near the end of the US session is trading at 17.95. 

USD/MXN holds a bullish corrective tone, with price above the 20-day moving average, that offers support around 17.80 and now slightly above the 55-SMA, for the first time since May. 

Banxico coming

After last week NFP, attention now in the US turns to inflation data with the PPI on Thursday and CPI on Friday. In Mexico, July CPI will be released on Wednesday while the key event will be the central bank meeting. 

“Banco de Mexico then meets Thursday and is expected to keep rates steady at 7.0%.  Price pressures are showing signs of topping out, and so we believe the tightening cycle is over for now”, said analysts from Brown Brothers Harriman.