USD/MXN: Mexican peso rises to the highest since December

The Mexican peso is today among the best performers in the currency market. USD/MXN dropped below 20.65 and fell to 20.43, hitting the lowest level since December 21. The pair is about to end the day hovering around 20.50; two weeks ago it was testing levels on top of 22.00.

Since last week, the Mexican peso has risen more than 3% as it continues to recover lost ground. USD/MXN is now lower for the year. Price is back under the 20-day moving average for the first time since the November election. 

Banxico next week 

Next Thursday, the central bank of Mexico will announce its decision on monetary policy. Analysts consider that the bank could raise rates again. Banxico rose rates during 2016 in order to keep inflation expectation anchored and to avoid a larger depreciation. 

The rate hike could take place, despite the fact that the Federal Reserve yesterday, left the Fed Funds rate unchanged at 0.50% - 0.75%, as expected.