USD/MXN rises for the first time in twelve days, remains bearish but above 22.00

• Mexican peso ends 7-day positive streak versus US dollar.
• USD/MXN corrects higher but maintains the bearish trend.

The Mexican peso retreated versus the US dollar on Wednesday, posting the first lost since May 15. The decline was modest and it still maintains a positive bias.

The improvement in risk sentiment has been supporting the MXN over the last days. On Wednesday, the tone across financial markets was mixed as positive expectations about reopening economics were offset by US-China tensions.

The USD/MXN rose from 22.13 to 22.48 on Wednesday and then pulled back to the 22.30 area. It moved off the two-month low it reached on Tuesday at 22.10 but the trend still points to the downside. The key support stands at 22.00/05, a break lower should clear the way to more losses.

Banxico presents Q1 report

The Bank of Mexico released its quarterly report. The central bank expects the growth at -4.6% in 2020 and a 4.1% rebound in 2021. According to the report the balance of inflation risks is still uncertain. They raised its Q4 inflation forecast to 3.5% from 3.2% and its core to 3.8% from 3.0%. Between 800K to 1.4m jobs could be lost during 2020 according to Banxico.