The Mexican Peso depreciates against the US Dollar as high US Treasury yields underpin the Greenback on Tuesday.
Mexican Peso drops, weighed by risk-off mood and strong US economic data. Banxico Deputy Governor Omar Mejia hinted at a negative output gap by late 2024, potentially influencing future inflation. Traders await Mexico’s September inflation data and Banxico meeting minutes, with expectations for further rate cuts by year-end. This and news that China’s stimulus program fell short of market expectations weighed on the emerging market currency. The USD/MXN trades at 19.35, up over 0.50%.
Data from the Chicago Board of Trade via the December fed funds rate futures contract shows investors estimate 49 bps of easing by the Fed toward the end of 2024. Market participants have disregarded a 50 bps cut. The odds of a 25 bps cut are 85.3%, while the chances for holding rates unchanged are at 14.7%, according to the CME FedWatch Tool data. USD/MXN technical outlook: Mexican Peso drops as USD/MXN jumps above 19.30 Despite falling below the 50-day Simple Moving Average at 19.
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