USDMXN retreat after five consecutive days with gains as the unemployment rate surprised positive. The unemployment rate in Mexico fell to 2.9% in March from 3.2% in March 2019, and below the expectations of 3.3%. Seasonally adjusted the unemployment rate declined to 3.3% from 3.7% the previous month, and below the expectations of 3.7%. Meanwhile, the participation rate dropped down to 59.8% from 60% a year earlier.
Mexican government set up a relief package hopping to protect the 70% of the Mexican citizens as the country faces a historic economic emergency. The measures include a 25% reduction in the salaries of senior-level public officials, the cancellation of 10 undersecretary positions, the creation of two million new jobs and the delivery of 3 million credits of around $1,200 each directed to low or no income population.
Banxico surprised markets with a 50 bps rate cut that brought the target rate at 6% in an attempt to support the economy and increase exports. That was the third interest rate cut in the last three months for a total of 125 bps reductions.
Meanwhile, the crude oil price resumed downtrend today as the market is running out of storage facilities. The WTI crude oil price is 27.74% lower at $12.23 per barrel.
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USDMXN is 0.90% higher at 24.7549 as the attempt from the previous week to chase new record highs halted after better than expected jobless rate data. The pullback today doesn’t change the bullish outlook for the pair. Bulls are comfortably sitting above the 24.0000 mark.
On the downside, the initial support for USDMXN will be met at 24,7250 today’s low. The next support area for the pair stands at 24.3013 the low from April 23. More bids might emerge at 24.0116 the low from April 21.
On the flip side, the immediate resistance stands at 25.0246 the daily high. A break above might drive USDMXN to 25.2994 Friday’s session high. In case the USDMXN breaks higher, then the next resistance stands at 25.7824 the high from April 6.