USD/MXN hits 4-week lows and rises back above 18.60

The Mexican peso is rising marginally against the US dollar. Earlier it reached the highest level since late April and approached 2017 lows. 

USD/MXN bottomed at the beginning of the American session at 18.55. Then it climbed toward 18.70. Near the end of the day, it was hovering around 18.65. 

After testing last week the strong resistance area located around 19.20/25, the pair now remains near 2017 low located at 18.45. 

Mexican data 

Today the Mexican government revised upward the 2017 growth estimate to 1.5-2.5% from 1.3-2.3% estimate. Earlier the statistics agency (INEGI) announced that the economy grew at a rate of 0.7% during the first quarter (q/q). GDP expanded at an annual rate of 2.7%. 

The next key economic report will be released on Wednesday with the mid-May CPI index. “Is expected to rise 6.09% y/y vs. 5.62% in mid-April.  If so, this would be the highest inflation rate since 2009 and certainly supports Banxico’s decision last week to hike rates 25 bp. Another hike in June is possible if the Fed hikes on June 14”, said analysts from Brown Brothers Harriman.