USD/MXN Approaches 16.60 Mark Before Mexico’s Jobless Rate and Trade Balance Data

• USD/MXN moves closer to 16.60 ahead of Mexico’s Jobless Rate and Trade Balance data.
• The decline in US Treasury yields may curb the US Dollar’s rise.
• Banxico Governor Victoria Rodriguez Ceja stresses the ongoing battle against inflation.
• USD/MXN retraces its recent losses, with the Mexican Peso gaining momentum before releasing Mexico’s Jobless Rate and Trade Balance data. The pair reaches nearly 16.60 during Wednesday’s European trading hours.

INEGI reports a slight expansion in Mexico’s economic activity gauge, rebounding from a two-year low but falling short of expectations. This aligns with the trend that Mexico’s economy is becoming less resilient to Banxico’s restrictive interest rates.

During an interview, Banxico Governor Victoria Rodriguez Ceja maintains a cautious stance, highlighting the ongoing fight against inflation. Discussions about further rate cuts to the primary reference rate will likely be on the agenda in upcoming meetings.

The US Dollar Index (DXY) continues its upward trend for the second consecutive session, trading near 104.40 during Wednesday’s European hours. US Treasury bond yields for the 2-year and 10-year periods are at 4.59% and 4.22%, respectively.

Atlanta Fed President Raphael Bostic expects only one rate cut this year, warning against premature reductions due to potential disruptions. Conversely, Chicago Fed President Austan Goolsbee aligns with the majority, forecasting three cuts.

The US Dollar receives support from market risk aversion ahead of the release of US Gross Domestic Product Annualized on Thursday and Personal Consumption Expenditures (PCE) on Friday.

USD/MXN