The Mexican Peso (MXN) has experienced a rally for the second consecutive trading session, driven by increased risk appetite among investors. The recent agreement to raise the US debt ceiling has boosted investor optimism, leading to a rise in equity futures. While the US Dollar Index (DXY) remains relatively stable, USD/MXN has witnessed a sharp decline due to Mexico’s robust GDP growth.
Factors Driving USD/MXN Decline
USD/MXN dropped significantly as investors’ optimism prompted them to seek out riskier assets, resulting in the appreciation of emerging market currencies against the US Dollar (USD). The Mexican Peso (MXN) gained momentum, with USD/MXN experiencing a 0.36% decrease. At the time of writing, the USD/MXN exchange rate stands at 17.5550, after reaching a daily high of 17.6236.
Impact of US Debt Ceiling Agreement and Strong US Data
Over the weekend, talks between Republicans and Democrats led to an agreement to raise the US debt ceiling. This development was well-received by investors, as evidenced by the rise in equity futures. US President Joe Biden and House Speaker Kevin McCarthy are confident that the agreement will pass Congress. Additionally, recent economic data from the United States (US) has put the US Federal Reserve (Fed) in the spotlight. The probability of a 25 basis points (bps) interest rate hike in June has increased from 25.7% to 58.4% as a result.
Several key indicators, including Retail Sales, Industrial Production, GDP, and Consumer Spending, show improvement in US data. The Core Personal Consumption Expenditures (PCE) index, which is the Fed’s preferred gauge for inflation, remains around 4%. Consequently, US bond yields have risen sharply, supporting the US Dollar.
Impact of Mexico’s Strong GDP Growth
While the US Dollar Index (DXY) has remained relatively unchanged at 104.240, it has failed to stem the decline of USD/MXN. The Mexican Peso has strengthened following Mexico’s sixth consecutive quarter of growth, with a 1% increase in Gross Domestic Product (GDP) during the period.
The trajectory of the Peso is largely dependent on the Fed’s response to a possible recession, especially if the US economy slows down amid concerns about inflation. ING analysts suggest that if the US experiences a significant slowdown, and the Fed continues to grapple with inflation while maintaining high dollar rates, the Peso could start to suffer.
Technical Outlook for USD/MXN
From a technical perspective, USD/MXN remains biased towards further decline after breaking below the 20-day Exponential Moving Average (EMA) at 17.7662. This decline exacerbates the potential fall towards the psychological support level of 17.5000. A break below this level could bring the year-to-date (YTD) low of 17.4238 into play, with further support seen at 17.0000. On the other hand, USD/MXN buyers would need to reclaim the 20-day EMA to potentially drive the pair towards the 50-day EMA at 17.9706.
Conclusion
USD/MXN has experienced a significant decline as investors’ risk appetite increased and emerging market currencies strengthened against the US Dollar. The Mexican Peso (MXN) has rallied for the second consecutive trading session, benefiting from the US debt ceiling agreement and Mexico’s strong GDP growth. The future trajectory of USD/MXN will largely depend on the Fed’s response to a potential recession and the performance of the US economy. Traders should closely monitor key economic indicators and developments to navigate the currency pair effectively.
How Much 5500 pesos to dollars?
To convert 5,500 pesos to dollars, you can use the current exchange rate for USD/MXN. In the provided context, the exchange rate is mentioned as follows:
USD/MXN
Today last price: 17.5634
To calculate the equivalent amount in dollars, you can divide the amount of pesos by the exchange rate:
5500 pesos / 17.5634 USD/MXN ≈ 313.39 dollars
Therefore, 5,500 pesos is approximately equal to 313.39 dollars. Please note that exchange rates can fluctuate, so the actual conversion may vary slightly.
USD/MXN
| OVERVIEW | |
|---|---|
| Today last price | 17.5634 |
| Today Daily Change | -0.0621 |
| Today Daily Change % | -0.35 |
| Today daily open | 17.6255 |
| TRENDS | |
|---|---|
| Daily SMA20 | 17.7505 |
| Daily SMA50 | 18.0109 |
| Daily SMA100 | 18.3223 |
| Daily SMA200 | 19.045 |
| LEVELS | |
|---|---|
| Previous Daily High | 17.8635 |
| Previous Daily Low | 17.6165 |
| Previous Weekly High | 17.9981 |
| Previous Weekly Low | 17.6165 |
| Previous Monthly High | 18.4018 |
| Previous Monthly Low | 17.9329 |
| Daily Fibonacci 38.2% | 17.7108 |
| Daily Fibonacci 61.8% | 17.7691 |
| Daily Pivot Point S1 | 17.5402 |
| Daily Pivot Point S2 | 17.4548 |
| Daily Pivot Point S3 | 17.2932 |
| Daily Pivot Point R1 | 17.7872 |
| Daily Pivot Point R2 | 17.9488 |
| Daily Pivot Point R3 | 18.0341 |
