USDMXN

USDMXN Pare Losses As Powell Rejects Negative Interest Rates

USDMXN pare losses after Jerome Powell rejects negative rates. Powell said that the last FOMC meeting minutes showed that all members were against negative interest rates. He also reiterated that negative rates were not something they were considering.

Powell added: “Evidence on negative rates is very mixed, concern over negative rates is interrupting intermediation,” and “Main street lending program will be able to go live in a few weeks. Federal Reserve will be a big help to companies for a while, but more fiscal help will be needed over time.”
Commenting on the economic recovery, he said: “May take even a few more months for economic recovery to take shape. Slower recovery means the Fed may have to do more.”

I believe that that Fed will not proceed with negative rates any time soon despite the pressure from President Trump and markets. Fed might extend the bond-buying program and the ETF’s buying and will turn to negative rates in case of extreme economic deterioration.

Mexican central bank will meet on Thursday to decide on interest rates with expectations pointing to a rate cut by 50 basis point to 5.50%.

USDMXN Price Resistance and Support

USDMXN is 1.16% lower at 24.1172 reversing the two consecutive days of gains. The technical picture is bullish for the pair despite today’s pullback. USD is very strong against the Mexican peso, and the pullbacks might be considered as a buying opportunity. 

On the downside, the initial support for USDMXN will be met at 24,0069 today’s low. The next support zone for the pair stands at 23.7540 the low from yesterday’s trading session. More bids might emerge at 23.6959 the 50-day moving average. 

On the other side, the first resistance for USDMXN stands at 24.3964 the daily top. A break above might drive the pair to 24.8648 the high from May 4. In case the pair breaks above 24.8648, then the next resistance will be met at 25.2859 the high from April 24.     

Don’t miss a beat! Follow us on Telegram and Twitter.

USDMXN price chart

USDMXN Pare Losses As Powell Rejects Negative Interest Rates
USDMXN Pare Losses As Powell Rejects Negative Interest Rates

More content

Related Posts: