The Mexican Peso is showing renewed weakness against the dollar as USD/MXN attempts to break higher from recent base levels, according to Societe Generale strategists. The currency pair has maintained support near the critical 17.10 level but is now pushing toward resistance at the 200-day moving average around 17.80. The move comes as Mexico’s central bank Banxico has opted to pause its monetary policy cycle, removing a key pillar of peso support.
Traders should watch the 17.30 level as immediate support, with a break below potentially signaling a return to recent lows. Conversely, a decisive move above 17.80 could open further upside for the dollar against the peso. The shift in Banxico’s stance marks a significant change in the peso’s fundamental backdrop, particularly impacting carry trade positions and emerging market portfolios with Mexican exposure.
FXnCO Insight
Monitor the 17.80 resistance closely as a breakout would likely accelerate peso weakness and trigger stop-losses on long MXN positions established during the Banxico tightening cycle.
Source: FXStreet