Mexican Peso continues to climb into 2023 finish line

• The Mexican Peso gains further ground as the US Dollar selloff continues.
• Mexico's Jobless Rate stays unchanged in November, US Jobless Claims climbed last week.
• Coming up on Friday: US Chicago PMI, Mexico Fiscal Balance.

The Mexican Peso (MXN) continued to climb through the penultimate trading day of 2023, poised for a third straight week of gains against the US Dollar (USD) as the Greenback faces broad-market selling pressure.

Mexico’s unadjusted Jobless Rate held steady in November, thumbing its nose at market expectations of a minor decline, though the seasonally adjusted figure ticked higher. On the US side, Initial Jobless Claims and Pending Home Sales both missed expectations to come in worse than expected. With US data softening at the print, bad news is good news in topsy-turvy markets that are looking for accelerated rate cuts from the Federal Reserve (Fed).

Daily digest market movers: Mexican Peso hits fresh 16-week as Greenback continues to backslide

• The Mexican Peso is up around 0.3% against the US Dollar on Thursday, gaining 0.8% from the week’s opening bids.
• Broad-market USD selling pressure is bolstering the Peso, with the US Dollar the single worst-performing of the majors, in the red across the board for the last trading week of the year.
• Mexico’s unadjusted Jobless Rate held steady at 2.7% in November versus the forecast tickdown to 2.6%, though the seasonally-adjusted figure showed a slight jump to 2.8%.
• US Initial Jobless Claims jumped to 218K for the week ended December 22, vaulting over the forecast 210K and pushing even higher from the previous week’s 206K (revised upwards from 205K).
• US Pending Home Sales in November also failed to recover as much ground as forecasts expected, printing at a flat 0.0% compared to a forecast 1.0% gain; October’s print of -1.2% was revised slightly upwards from -1.5%.
• Friday will round out the 2023 trading year with the US Chicago Purchasing Managers’ Index for December, forecast to decline from 55.8 to 51.0.
• Mexico’s Fiscal Balance in Peso terms for November will wrap up the year’s economic data prints from Mexico. The Secretaría de Hacienda y Crédito Público, Mexico’s finance ministry, last printed a MXN 29.58 billion deficit in October.

Technical Analysis: Mexican Peso stretching for further gains to wrap up the year, USD/MXN sinks in rough trading

The Mexican Peso (MXN) climbed to a fresh 16-week high against the US Dollar on Thursday, sending the USD/MXN to a multi-month low of 16.86. The pair has steadily declined through the shortened trading week and is currently down nearly a full percent peak-to-trough.

The USD/MXN is poised to close in the red for the third straight week and is set to close December in the red as well, rounding out one of the US Dollar’s worst-performing years against the Peso to date, closing lower for 9 of the past 12 straight months.

Ongoing selling pressure has brought the USD/MXN within multi-year lows near 16.60, and a break below this level would mark the pair’s weakest bids since December 2015.

On the high side, the 200-day Simple Moving Average (SMA) is parked near 17.45, and bearish cross of the 50-day SMA is chalking in a long-term resistance barrier to cap off any bullish reversals.

USD/MXN Hourly Chart

USD/MXN Daily Chart