Mexico cuts GDP forecast to 2.0% - 2.6% range in 2016

Was 2.2% - 3.2% prior

Earlier today, Mexico announced that the economy contracted by -0.2% in the 2Q vs the prior 3 months.  A slowing in the service industry and an export fall contributed to the decline.  It was the 1st decline in 3 years.  

The economy has been hit by a slump in exports to the US and declining oil prices.  

Growth according to a survey from Bloomberg economists estimated growth to slow to 2.3% in 2016. The lowering of the estimate brings the number in line with the estimates.  

The central bank raised rates by 1% earlier in the year to slow a pickup in inflation from higher import costs.  Earlier this month, the central bank refrained from raising rates as the peso's rebound, helped to curb inflation risks and growth was slowing. 

Looking at the daily chart for the USDMXN, the pair last week, tested the 200 day MA at the 17.9176 level and held. The rally higher today (lower MXN) has pushed the price back above the 100 day MA at the 18.27402 level. Staying and closing above is more bullish technically. 

Drilling down to the hourly chart, the pair held support against the 200 hour MA late Friday and earlier today.  The support buying at the 100 day MA is also quite noticeable. Traders are leaning against the risk defining level looking for a push higher.   Key level technically for the buyers.

Mexico cuts GDP forecast to 2.0% - 2.6% range in 2016
Mexico cuts GDP forecast to 2.0% - 2.6% range in 2016
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