- USD/MXN receives upward support on improved Greenback.
- US Dollar could extend gains as US bond yields rebound.
- Banxico revised economic growth to 3.3% and 3.0% for 2023 and 2024, respectively.
USD/MXN recovers its intraday losses on Wednesday. trading higher around 17.3000. The recovery in the US Dollar (USD) could be extended due to the upbeat US Gross Domestic Product Annualized data for Q3 showed robust growth at 5.2%, surpassing the anticipated 5.0%,
The US Dollar Index (DXY) receives upward support, possibly influenced by improved US bond yields. However, the Greenback might have faced challenges on mixed remarks from Federal Reserve (Fed) members. Cleveland Federal Reserve (Fed) President Loretta Mester emphasized that decisions regarding additional interest rate hikes would depend on data-driven considerations. On the other hand, Fed Governor Christopher Waller has suggested a more accommodative approach by reducing interest rates. However, markets are pricing in a cumulative 100 basis points (bps) of rate cuts by the Fed in 2024.
Investors are likely awaiting the release of the Personal Consumption Expenditure (PCE) Price Index data on Thursday, along with US weekly Jobless Claims, to gain further insights into the inflationary pressure in the United States.
The Bank of Mexico (Banxico) unveiled its quarterly report on Wednesday, bringing positive adjustments to economic growth forecasts. The projection for 2023 has been revised upward from 3.0% to 3.3%, with expectations that the economy will further accelerate from 2.1% to 3.0% in 2024. On the inflation front, Banxico anticipates a rate of 4.4% in Q4 2023, while the forecast for 2024 points to a moderation at 3.4%.
Furthermore, traders may observe Mexico’s Jobless Rate and Fiscal Balance for October on Thursday.
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