USD/MXN in a range between 17.60 and 17.80 ahead of Fed and Banxico

The Mexican peso is falling modestly against the US dollar, validating yesterday’s losses and recently moved further to the upside, after an earthquake hit Mexico City. 

USD/MXN continues to trade in a range, moving sideways in a channel with support at 17.60 and resistance at 18.00. A break above 17.80 could lead to a test of the 18.00 area while to the downside, under 17.60, attention would turn to 17.55 and also on 2017 lows that lie at 17.44. 

At the moment, the pair is testing the 17.80 short-term resistance, with the Mexican peso losing momentum in the market amid reports of the damage from the earthquake. 

Fed, Mexican CPI and then Banxico

Tomorrow the Federal Reserve will announce its decision on monetary policy. No change in rates is expected. Also, upgraded projections will be presented and Janet Yellen will hold a press conference.

In Mexico, CPI data is due on Friday. The index is expected to rise to 6.60%.  “Inflation remains well above the 3% target and the 2-4% target range, but appears to be topping out as August full month reading was 6.7%”, said analysts from Brown Brothers Harriman. The next meeting of the Bank of Mexico is September 28, no change in rates is expected.