- The USD / MXN drops for the third day of the last four days.
- WTI June Futures peaks at two months on demand expectations.
- The coronavirus continues to spread in Mexico, said President Andrés Manuel López Obrador, the country must adapt to the “new normal”.
- No major data keeps the pair of traders oriented towards the movements of oil prices, qualitative catalysts.
The USD / MXN drops to its intraday low of 23.90 during the first Asian session on Monday. While the US dollar has posted large gains against most of its counterparts, largely due to the latest comments from Fed Chairman Powell, the pair appears to be following oil price movements for the latest fall.
Read: WTI pierces $ 30, rallying to hopes of demand
WTI June Futures on NYMEX is rising to its highest since mid-March after comments from the weekend by US Federal Reserve Chairman Jerome Powell boosted demand expectations. The energy benchmark benefited earlier from the decline in the US dollar and further weakening of inventories, not to mention the production cuts of the main producers.
Fed Chairman Powell recently gave an optimistic tone to the country’s recovery while pouring cold water on the faces of those who expect negative Fed rates. Despite this, the head of the Fed cited the power of ammunition from the central bank if necessary.
In contrast, the coronavirus (COVID-19) spreads more quickly in Mexico. The latest update from health officials, quoted by Reuters, said that “Mexico recorded 49,219 cases of coronavirus on Sunday, the death toll was 5,177”.
Amidst all these catalysts, the risk tone of the market remains positive with yields on 10-year US Treasuries and Asian stocks posting moderate gains at press time.
In the future, a lack of major data / events will keep the pair’s traders oriented towards oil price movements and trade / virus updates for a new direction.
A rising trend line from the end of March, at 23.60, seems to offer solid support during the progressive decline of the pair. On the contrary, a three-week bearish trend line, currently around 24.20, restricts the immediate rise in the pair.