Mexican Peso Rallies as Market Mood Brightens
Risk appetite improved as investors reacted positively to signs that a bipartisan agreement could soon reopen the U.S. government.
Quick overview
- The Mexican peso strengthened against the dollar, closing at 18.3807 pesos per dollar amid optimism over a potential end to the U.S. government shutdown.
- The peso gained 0.42% as the U.S. Senate advanced a motion to resolve the longest government shutdown in U.S. history.
- Despite the positive sentiment, trading remained moderate with lower volumes expected due to the upcoming Veterans Day holiday.
- Technical analysis indicates short-term resistance for the peso at 18.46 pesos and support near 18.30 pesos.
The Mexican peso strengthened against the dollar at the start of the week, supported by renewed appetite for risk assets amid growing optimism that the partial shutdown of the U.S. federal government could soon come to an end.
The local currency advanced against the greenback in Monday trading, recovering ground after several days of uncertainty. The exchange rate closed at 18.3807 pesos per dollar, compared with 18.4573 on Friday, according to official data from Banco de México (Banxico). That marks a gain of 7.66 centavos, or 0.42%, for the peso.
During the session, the dollar traded within a narrow range, touching a high of 18.4534 and a low of 18.3663 pesos. The U.S. Dollar Index (DXY), which measures the greenback’s performance against six major currencies, eased 0.03% to 99.57 points, reflecting a modest retreat in demand for the U.S. currency.
The peso’s appreciation came after the U.S. Senate advanced a motion on Sunday to end what has become the longest government shutdown in U.S. history. The political impasse had delayed the publication of key economic indicators and dampened sentiment across global markets.
Risk appetite improved as investors reacted positively to signs that a bipartisan agreement could soon reopen the U.S. government, after several Democratic senators backed a proposal to break the deadlock.
Despite the positive tone, the peso’s movements remained relatively contained, with moderate volatility throughout the session—partly attributed to lower trading volumes ahead of the Veterans Day holiday in the United States, which is expected to reduce liquidity on Tuesday.
From a technical perspective, the peso faces short-term resistance at 18.46 pesos—the 50-day moving average—and at the psychological barrier of 18.50 pesos. On the downside, initial support is located near 18.30 pesos.
Market participants expect lighter trading conditions in the coming session due to the U.S. holiday, though sentiment remains cautiously optimistic as investors monitor further progress on the fiscal negotiations in Washington.
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