USD and CAD / MXN Peso Currency Update Sept 7, 2023

Here are the most recent charts for these currencies versus the Peso, look at the USD Peso chart with my comments...

While there are many fundamental factors that play into the currency markets, there could be another explanation for the recent drop in the Peso versus the USD and Cnd$. Looking at the long-term chart, COVID restrictions did impact the demand and value of the Peso... less travel to Mex=Weak Peso.

COVID is being discussed, masks and lockdowns could be coming and possible travel restrictions could be a factor for the recent weakening of the Peso. The trend for Peso strength over the last year could be coming to an end if restrictions get worse like they were back in 2020 and 2022, the FX market is now starting to factor that into the price, especially of future demand for Pesos.

Also, while I do believe the USD should remain Fundamentally Weak compared to the MXN Peso (I will explain in a future post), its demand could increase during the transition to the FEDNow CBDC. Banks could (will) become the buyers of USD to convert into the new CBDC, so ironically the dollar could strengthen from here, which could lead to a weaker peso.

Also, the FX for USD/MXN was at a technical pivot point and it did not break down further, so a bounce was due. The CAD/MXN did much worse over the last year and broke down to a long-term support zone, and now we are seeing a bounce, so the worst could be behind us for CAD holders who are looking into buying Pesos in the Future.

For those looking to buy Pesos, waiting a few months could present a better buying opportunity as the oversold conditions are going to get a bounce from here, and probably retest a moving average which is higher from here.

For CAD holders, look to see it rise to about 14.00-14.50 range, which should be a resistance zone. For USD holders, the resistance zone should be around 18.50-19.00. It could take a few months to hit these targets, but we are due for a technical bounce and it has started.

For those looking to sell Pesos, now is not a bad time to do so for a short 2-5 month trade. These are just some of my thoughts on recent events and possible travel restrictions that are affecting the value of the Peso. Feel free to agree, disagree, or provide your thoughts below.

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#USDollar #USD #CAD #MXN #PESO #USDT

Cheers Vin