FXStreet (Córdoba) – USD/MXN remained steady, hovering around 16.60 after the central bank of Mexico (Banxico) left the overnight interest rate unchanged at 3% as widely expected. The Mexican peso was unaffected by the decision.
In its statement, Banxico mentioned that the economy continues to grow modestly, exports lost momentum, but consumption strengthened while the growth outlook worsened. Inflation continues to point lower with expectations are well anchored around 3%. The central bank repeated that Federal Reserve actions could have a large impact on the exchange rate and inflation expectations, signaling that if the Fed rises rates, Banxico will probably raise too.
USD/MXN rose sharply yesterday after the Fed left the door open for a December rate hike. Price rose from 16.45 and peaked at 16.69, the highest in a week.
On a wider perspective, the pair continues to move in a range with a key support area between 16.30 and 16.35 and a resistance zone around 16.70. A break of the range could define the direction of the next move.
(Market News Provided by FXstreet)