USD/MXN rises back to 19.20, holds near two-months highs

• Mexican peso drops versus US dollar for the fifth time in a row.
• Risk aversion continues to support the greenback against emerging market currencies. 

The USD/MXN is rising again on Wednesday, approaching to February highs. As of writing, it stands at the daily high at 19.21, about to post the highest close since December 12. 

The Mexican peso remains under pressure amid risk aversion across global markets. The recovery in equity prices lost strength over the last hours, boosting the USD/MXN back to the 19.20 area. 

After falling on Tuesday almost 900 points, the Dow Jones is losing 0.30%; hours ago it was up by more than 1%. The greenback remains strong versus emerging market currencies amid risk aversion, despite the decline in US bond yields. 

Over the last five days, the Mexican peso lost more than 3% versus the US dollar and was among the worst performers. Data released yesterday from Mexican showed that during 2019, the economy contracted for the first time since 2009. In the fourth quarter, GDP contracted by 0.5%. 

Technical levels 

To the upside, the immediate resistance is seen around 19.23; a daily close above would clear the way to more strength and to a test of 19.35. The 18.95 zone has become a key support for USD/MXN followed by 18.80 (horizontal level and 20-day SMA).