USD/MXN rallies back towards 2019 high on failed US-Mexico talks

• US-Mexico talks to halt illegal migration defied earlier optimism after failing.
• Provides additional burden into the global trade system.

With the White House talks between the US and Mexico ending on a negative note, the USD/MXN pair grows back towards fresh 2019 high as it trades around 19.7983 during the early Asian session on Thursday.

The US Vice President Mike Pence held talks with Mexican authorities in absence of the US President Donald Trump to solve the illegal migration issue with the neighbor and help it avoid harsh tariffs that were previously announced by President Trump.

At the end of the talks near 22:00 GMT, Mexican leaders ran out of the White House without being positive and the NBC rolled out the news that no deal on immigration was reached between the trade partners.

Adding to the Mexican currency’s weakness could be global credit rating agencies. As per the latest news Firth and Moody’s were the first to convey their worries relating to the country by either downgrading their credit outlook or altering credit rating.

The US Secretary of State Mike Pompeo will now talk to Mexican Foreign Minister and may convey the results soon.

Official details of the meeting are still awaited and might offer clues as to the next round of talks if any. Should there be a complete silence about the talks, it can be assumed that 5% tariffs on Mexican goods will be activated from Monday and will add strain on to the global trade system.

Technical Analysis

Sustained break of 19.88 becomes necessary for the quote to aim for 20.00 round-figure and then rush in the direction to 20.3835.

Should prices step back below 19.4270, 19.2350 and 19.00 could become sellers’ favorites.