USD/MXN gains ground on subdued US Dollar, trades higher near 17.25
|- USD/MXN receives upward support as the Greenback suffers losses.
- The decline in US bond yields reinforces the weakening of the US Dollar.
- Banxico survey increased their growth forecast from 2.10% to 2.29%, with inflation to reach 4.0% in 2024.
USD/MXN extends its gains on the second consecutive session, trading higher near 17.25 during the European hours on Monday. The USD/MXN pair gains ground on the subdued US Dollar, which could be attributed to the lowered US Treasury yields.
The US Dollar Index (DXY) moves sideways to 102.50, by the press time, with 2-year and 10-year yields on US bond coupons standing lower at 4.41% and 3.91%, respectively.
Additionally, Atlanta Fed President Raphael Bostic has suggested the potential for an interest rate cut in the third quarter of 2024. Meanwhile, Chicago Fed President Austan Goolsbee has not ruled out the possibility of a rate cut at the Federal Reserve's meeting next March. These dovish comments from Federal Reserve officials contribute to the prevailing pressure on the Greenback.
According to the Banxico survey, Mexican economists have increased their growth forecast for 2024 from 2.10% to 2.29%, while anticipating inflation to reach 4.0% next year. In terms of monetary policy, they expect the central bank to bring rates down to 9.25%.
The Mexican Peso (MXN) has received upward support following Banxico's decision to maintain policy rates at the level of 11.25%. This decision and the economic outlook provided by the survey are contributing factors to the currency's positive momentum.
Investors will likely observe data releases from Mexico including Private Spending, Retail Sales, and seasonally adjusted Trade Balance for November. On the United States docket, Consumer Confidence and Existing Home Sales Change will be eyed.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.