- The Mexican Peso (MXN) is experiencing a dip against the United States Dollar (USD) during the New York session.
- A rise in inflation in Mexico could prompt the Bank of Mexico (Banxico) to keep interest rates higher, impacting the USD/MXN trading.
- The USD/MXN pair is currently trading at 17.42, showing a gain of 0.81%.
Economic data from Mexico indicates that Banxico may need to maintain higher interest rates for longer than initially forecasted, affecting the USD/MXN pair. As of now, the pair is trading at 17.42 with a 0.81% gain.
Mexico’s National Statistics Agency (INEGI) reported an increase in inflation in November, whereas core readings dipped. The USD/MXN has been supported by a rise in United States Treasury bond yields, while the US Dollar Index (DXY) remains weak, currently at 103.65, down by 0.49%.
The recent rise in Mexico’s Consumer Price Index (CPI), along with conflicting statements from Banxico’s officials, and cooling labor market data in the United States, are all contributing to the market movement of the Mexican Peso. With the current inflation data in Mexico and the USD’s performance, traders are closely monitoring the USD/MXN pair.
- Mexico’s CPI in November increased 4.32% YoY, surpassing September’s 4.26%, but still below the projection of 4.40%. The Core CPI slowed from 5.5% to 5.30% YoY.
- Banxico’s officials made conflicting statements regarding policy easing based on the inflation situation in Mexico, causing uncertainty in the market.
- US labor market data shows a cooling trend, with job cuts and initial jobless claims both impacting market sentiment.
- The Federal Reserve’s position on rate cuts and the market’s expectations of future rate slashes are contributing to the USD/MXN movement.
- Market futures suggest the Fed may cut rates by 135 basis points by December 2024.
On a technical analysis front, the USD/MXN pair is struggling around the 100-day SMA at 17.38, with potential resistance at the 17.50 and 17.55 levels. Traders are closely monitoring these key levels for potential trading opportunities.
