Forex News
MUFG strategists note Indonesia’s October Consumer Price Index (CPI) and core inflation both surprised on the downside, giving Bank Indonesia (BI) limited inflation-based justification to tighten policy. Nevertheless, the Indonesian Rupiah (IDR) remains weak above USD/IDR 18,000 and bond yields have risen, leading them to stay cautious and warn that a BI rate hike cannot be ruled out if currency pressures intensify.
Bank Indonesia constrained by weak Rupiah
"Indonesia's October CPI came in softer than expected, with headline inflation easing to 3.23%yoy from September's 3.28%yoy print and core inflation slowing to 2.56%yoy from 2.84%yoy, giving Bank Indonesia little inflation-driven reason to tighten, though IDR weakness remains a binding constraint."
"USD/IDR held above 18,000, while the 10-year Indonesian bond yield rose to 7.7%. Thursday's Q3 GDP release and Friday's FX reserves data will be key ahead of BI's 18 November policy meeting."
"We remain cautious on IDR, and a BI hike cannot be ruled out in the next policy meeting should currency pressures intensify."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/MXN surges over 1.40% to 18.84 amid US election uncertainty.
- Mexico's manufacturing PMI slips into contraction territory at 49.5.
- Strong US job openings and Factory Orders bolster Dollar demand.
The Mexican Peso (MXN) loses ground against the US Dollar (USD) on Tuesday amid ongoing developments in the US mid-term elections, with investors turning cautious as they await the results and the composition of the US Congress. The USD/MXN trades at 18.84, up by over 1.40%.
USD/MXN rebounds sharply as election uncertainty, weak Mexican manufacturing activity and solid US data pressure the Peso
Market mood is upbeat, with Wall Street poised to end the session with gains. In the FX space, the Greenback appreciates against emerging-market currencies, including the Peso.
The US Dollar Index (DXY), which measures the performance of the buck against six currencies, erased its previous losses, rising a modest 0.05% to 101.85. Tensions in the Middle East, their impact on energy prices, and the uncertain outcome of the US midterm elections are exerting pressure on the Mexican currency.
Data in Mexico showed that business activity in the manufacturing sector contracted. The S&P Global Manufacturing Purchasing Managers Index (PMI) in September contracted from 50.3 to 49.5. Companies attributed the fall in production to “cash flow difficulties, inflationary pressures, raw material shortages and subdued sales.”
The Bank of Mexico (Banxico) released its private economists' survey, in which the central bank said it expects inflation to remain within its 3% plus or minus 1% range. Additionally, analysts see the economy growing below the government’s 2% GDP forecast this and the next year, and that Banxico will hold rates unchanged through the end of 2027
In the US, the Job Openings and Labour Turnover Survey (JOLTS) for September rose from 7.19 million to 7.5 million, up 4.5% from the previous month, while Factory Orders rose from 0.3% to 1.8% MoM in September, revealed the US Census Bureau.
USD/MXN traders are watching US midterm elections. Polymarket gives Democrats a 75% chance of winning the Senate and 96% of controlling the House.
USD/MXN Price Forecast: Technical outlook
In the daily chart, USD/MXN trades at 18.8383, maintaining a bullish near-term bias as spot holds well above the triple simple moving average cluster, whose latest reading sits near 17.82 and reinforces the underlying uptrend. The pair is also comfortably above the horizontal support at 16.89, while the Relative Strength Index (14) around 65 suggests firm but not extreme bullish momentum after cooling from prior overbought conditions.
On the downside, initial support is seen at the latest close around 18.84, followed by the 50/100/200-day simple moving average area near 17.82, before a more distant structural floor at the horizontal line of 16.89. On the topside, the broader advance would face a major technical barrier at the downward resistance trend line, currently projected around 21.08.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
- DJIA gives back all of Monday's gains and hits its lowest since October 14.
- Chip stocks lift the Nasdaq and S&P 500 after three losing sessions in a row.
- Midterm votes are counted ahead of Wednesday, with October payrolls due Friday.
Gains in chip stocks have lifted the Nasdaq Composite and S&P 500 on Tuesday after three losing sessions, while the Dow Jones Industrial Average is moving the other way. It has given back all of Monday's gain and is trading near 51,700, just below Friday's close. Its session low near 51,500 is its lowest since October 14.
Apple (AAPL) is weighing on the Dow after Monday's results disappointed analysts, including a gross margin forecast and fiscal fourth-quarter iPad sales that missed estimates. After the results, HSBC cut its forecast for Apple's share price by $6, to $360.
Advanced Micro Devices (AMD) is up ahead of its third-quarter results, and Broadcom (AVGO), Micron (MU) and Nvidia (NVDA) are higher too. It's the reverse of Monday, when the Nasdaq Composite fell more than 1% and the Dow rose. The NASDAQ 100 is still about 10% below its recent high, against less than 6% for the Dow from its August peak.
On the calendar
US midterm votes are counted after Tuesday's polls close. Wednesday is the first session where the results for control of the House and Senate from January can be traded. Prediction markets put Democrats near 75% to take the Senate, and investors and analysts said stocks aren't yet priced for a Democratic sweep of both chambers.
The Automatic Data Processing (ADP) employment count for October is due at 13:15 GMT on Wednesday, forecast at 69K after 90K, and the Institute for Supply Management (ISM) services index follows at 15:00 GMT, forecast at 54.8. October Nonfarm Payrolls (NFP) are due at 13:30 GMT on Friday, forecast at 65K after 29K, and both counts feed the Fed's December rate decision.
On the charts
The drop from the late-October high near 52,900 has taken back about half of the climb that started just above 50,500 on October 1. The index is below its 50-day Exponential Moving Average (EMA) near 52,100 for a third session, and the 200-day EMA is near 50,750. Daily momentum has cooled out of overbought, where it was for most of the second half of October.
Dow Jones daily chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD held a tight range on Monday, with the Singapore Dollar supported by a slightly firmer SGD NEER. They expect the SGD NEER to stay 1.30%–1.80% above its policy midpoint, implying USD/SGD should remain confined near current levels, with broader Asian FX still pressured by portfolio outflows and cautious sentiment ahead of US midterm elections.
Dollar-Singapore pair seen sideways
"24-HOUR VIEW: Yesterday, we expected USD “to trade in a range between 1.2775 and 1.2800.” We were not wrong, as USD traded within a 1.2775/1.2797 range before settling at 1.2794 (+0.10%). We continue to expect range-trading today, but the slightly firmer underlying tone suggests USD is likely to trade in a higher range of 1.2785/1.2810."
"1-3 WEEKS VIEW: In our most recent narrative from one week ago (27 Oct, spot at 1.2810), we highlighted that USD “is likely to trade between 1.2775 and 1.2835.” Since then, USD has traded within a 1.2771/1.2837 range. With no clear increase in either downward or upward momentum, we continue to expect USD to trade between 1.2775 and 1.2835."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Commerzbank’s commodity team highlights disappointing Chilean Copper output, leaving third‑quarter production at a two‑decade low. Cochilco now forecasts an 8.4% slump in 2026 output and only a modest 3% recovery in 2027. Strong US import demand offers support, but Copper prices have still fallen below USD 14,000 per ton amid broader risk aversion and tech‑stock selling.
Chile cuts forecasts, prices under pressure
"Accordingly, the state copper commission Cochilco has revised its production forecast sharply downwards: instead of a marginal decline of 0.6%, it now expects production in the world’s largest copper-producing country to slump by 8.4% to 4.94 million tons this year."
"For next year, the commission at least forecasts a modest recovery of 3% to just under 5.1 million tons (previous forecast: 5.55 million tons)."
"Copper also receives support from persistently strong US import demand: according to information provider IHS Markit, 207,000 tons of copper were imported in October."
"However, the figures are not helping copper prices this morning: amid increased risk aversion towards technology stocks, copper is also being dragged lower, falling below USD 14,000 per ton to a seven-week low."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale reports Chinese authorities are again intervening after the CSI 300 fell 8.3% in October, its worst monthly drop in over a decade. The PBoC injected around RMB100bn via a one-year swap and will raise FX RRR from 4% to 6% on 15 November to curb one-way CNY appreciation. Earlier equity-support measures failed, leaving investors unsure about the latest steps’ effectiveness.
Equity slump prompts liquidity and FX moves
"Back in Asia, Chinese policymakers are once again stepping in to stabilise domestic markets after the CSI 300 slumped 8.3% in October, its worst monthly performance in more than a decade."
"The move comes after weak household consumption, lingering property-sector headwinds and growing investor unease over the sustainability of AI-related earnings growth pushed the CSI 300 below the psychological support of 4,000 late last week."
"Previous attempts to stabilise sentiment, including state-backed equity purchases in July and administrative measures aimed at discouraging selling last month, failed to lift sentiment, leaving markets questioning whether the latest intervention will prove more effective."
"Following discussions with the NFRA and CSRC, the PBoC earlier today conducted a one-year swap operation that injected roughly RMB100bn ($15bn) of liquidity into the financial system."
"Separately, the CNY ended its 13-day winning streak, the longest in three decades, after the PBoC earlier today announced that it will raise the FX RRR from 4% to 6%, effective 15 November, to curb excessive one-way appreciation pressure on the currency."
"According to Reuters calculations, the move will drain an additional $24bn of dollar liquidity from the financial system and reverses the decision of September 2023 to lower the FX RRR, which was aimed at stemming rapid yuan depreciation and capital outflows at the time."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Scotiabank analysts highlight the Pound trading steady against a mixed Dollar ahead of key risk events, including US midterms, UK PMI data, and the BoE decision. Sterling’s charts show a firm undertone after a strong mid-October rebound, but gains are stalling near technical resistance in the low 1.34s, with clearly defined resistance and support levels guiding near-term price action.
Firm undertone but gains stalling
"The pound is stable against the mixed USD overall. There were no UK data reports today and there is little incentive to move the pound significantly ahead of the US mid terms, tomorrow’s final UK Services and Composite PMI data for October and Thursday’s BoE policy decision."
"The strong rebound from the mid-October low which formed a bullish weekly reversal remains the salient feature of the charts and, with moderately bullish short-term trend momentum signals, keeps focus on scope for gains."
"Neutral/bullish – Sterling retains a firm-ish undertone, but gains have stalled against noted resistance in the low 1.34 area (200-day MA at 1.3426)."
"Resistance is 1.3470 and 1.3550 ahead of a return to the August peak at 1.3676. Key support is 1.3370/75."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Societe Generale analysts highlight that USD/KRW formed an interim low near 1320 and has since rebounded within a narrow base. The upper boundary of this range and the 50-day moving average around 1349/1353 are flagged as key resistance. A sustained move above would confirm a larger recovery, while failure to hold recent lows could see the broader downtrend resume.
Recovery hinges on break of 1353
"USD/KRW carved out an interim low near 1320 last month and has staged a modest rebound since then."
"The pair appears to be evolving within a narrow base."
"The upper boundary of this range, along with the 50-DMA at 1349/1353, could act as an important resistance zone."
"A break above this hurdle would be crucial to confirm a larger recovery."
"Conversely, if the pair fails to defend the recent low near 1330, the broader downtrend may resume."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
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