USDMXN Skyrockets to New All-Time Highs as Crude Oil Price Drops and on Coronavirus Fears

USDMXN
USDMXN

USDMXN soared by over 4% in today’s European session and tapped new all-time highs at 24.11. Why? Risk aversion and a crash in crude oil price has once again dampened demand for the Mexican peso.

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Along with the MXN, higher-yielding assets like stocks and risk currencies like the Aussie are down in today’s trading. WHO reported the largest single-day increase in confirmed cases of the coronavirus at 13,998 outside of China since the pandemic started. Consequently, investors became jittery because the infection still has not shown any signs of a slowdown. As it is, economies are already at the brink of recessions. Central banks are also aggressively pumping liquidity and it’s only a matter of time until they run out of tools to support their economies.

Another reason for the jump in USDMXN is the crash in oil prices. Earlier, WTI crude oil price CFDs slumped to 25.05 which makes its lowest level since August 2003. Mexico is eleventh largest producer of oil in the world and it also makes a significant chunk of its GDP through the commodity.

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USDMXN Outlook

On the hourly time frame, USDMXN seems to have steadied. It has some room to trade lower and still maintain its short-term uptrend. By connecting the lows of March 13 and today, we can see that there is trend line support at 23.30. This price also coincides with yesterday’s highs.

On the other hand, if buyers continue to dominate trading, we could see USDMXN rally past 24.11 and establish new record-highs.More content