USD/MXN rebounds and rises back above 24.00 as Mexican peso losses momentum

• Mexican peso gives up half of Wednesday’s gains versus US dollar.
• Emerging market currencies under pressure on Thursday as Wall Street drops 1%.

The USD/MXN pair rebounded on Thursday after hitting two-week lows at 23.63. It peaked at 24.08 and currently is hovering around 24.00, up 1.25% for the day. Emerging market currencies came under pressure after a rising during three consecutive days.

Despite rising versus currencies like ZAR, RUB and MXN, the greenback is falling sharply versus European majors. Month-end flow could have played a role in the decline of the greenback while risk aversion hit EM currencies. In Wall Street, the Dow Jones is falling 1.50%, and the Nasdaq slides 0.90%.

Economic data from Mexico and the US released on Thursday reflected the consequences of the coronavirus. In the US initial jobless claims reached 3.8 million, less than the previous week but still a dramatic number. In Mexico, real GDP contracted 1.6% during the first quarter, the worst performance since 2009.

The USD/MXN is up after falling during three days in a row. The intraday bias favors the upside, and it could test the 20-day moving average at 24.15. A slide back below 23.70 would expose the next support at 23.60. Under 23.60, the next strong support is seen at 23.20/25.