USD/MXN: Peso to struggle amid Banxico’s concerns about stubborn inflation – Commerzbank

FXStreet Insights Team FXStreet

The Peso depreciated against the USD yesterday. Minutes confirm Banxico’s concerns about stubborn inflation, risks remain, Elisabeth Andreae, FX Analyst at Commerzbank, reports.

Political risks

“On the markets, the inflation data, which remained below consensus, is likely to confirm the rate expectations. The expectations correspond with the announcement in the statement and seem to point towards a continuation of the rate cycle with smaller steps. In line with the TIE rates the market expects rates to peak at just above 11.5%. So the MXN will not find support on this front.”

“The Mexican congress recently passed a controversial reform of the National Electoral Institute (INE) that had been initiated by the President. According to reports, the opposition sees this as a risk to the running of free elections and it wants to challenge the reform as it is considered to be unconstitutional. Protests are planned. MXN investors are likely to keep an eye on that.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD stays offered near 1.3370

GBP/USD remains on the back foot, slipping back toward the 1.3370 zone on Tuesday. Cable has come under pressure soon after testing the 1.3400 neighbourhood as investors turned more cautious in response to renewed effervescence on the geopolitical front.

EUR/USD struggles above 1.1400 as fresh US strikes on Iran support USD ahead of FOMC Minutes

The EUR/USD pair defends the 1.1400 mark during the Asian session on Wednesday, though it struggles to attract any meaningful buyers on the back of renewed US-Iran hostilities. Traders also seem hesitant and opt to wait for FOMC Minutes for more cues about the Federal Reserve's policy path before placing fresh directional bets.

Gold hovers near $4,100; looks to Fed Minutes amid Iran tensions

Gold steadies around $4,100 following the previous day's downfall as traders opt to wait for the release of FOMC Minutes, due later this Wednesday. The outlook will influence the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion. In the meantime, fresh US strikes on Iran lift Oil prices to a two-week top, reviving inflation fears and supporting the safe-haven buck. This should cap the upside for the precious metal.

Bitcoin holds above $60K after weakest first-half performance in years

Bitcoin has shown strength over the past week, rising above the $63,000 level, but the rally remains fragile until exchange-traded fund inflows expand in the upcoming trading sessions, according to Wintermute.

Tehran markets ship attacks as customer service; Washington responds with ordnance

Iran's Foreign Ministry spent Tuesday insisting it is diligently fulfilling its Strait of Hormuz commitments under the memorandum signed at Versailles, hours after projectiles struck a Qatari liquefied natural gas carrier and a Saudi tanker inside the waterway it claims to be safeguarding.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.