The Mexican Peso (MXN) erases some of its Monday’s losses versus the Greenback (USD) and reclaims the 20-day Moving Average (DMA) despite a firm US Do
llar , with traders bracing for tomorrow’s US Federal Reserve’s decision. At the time of writing, the USD/MXN is trading at 17.0685, down 0.37%.
USD/MXN trades lower despite a strong US Dollar, as investors await updated economic projections from the Federal Reservemeeting. During the last economic projections, the Fed anticipated 1% economic growth, a 4.1% unemployment rate, 3.2% PCE inflation, 3.9% core PCE inflation, and the Federal Funds Rate peaking at 5.60%. These projections will be updated and play a crucial role in shaping the Fed’s future policy decisions.
In the meantime, housing data was revealed and came worse than expected. Housing starts slumped 11.3% last month, the lowest level since June 2020. Data for July was revised lower to show starts accelerating to a rate of 1.447 million units instead of the previously reported 1.452 million units. Meanwhile, Building Permits jumped 6.9% above the prior month’s 0.1% expansion, the most significant rise in six months.
Meanwhile, US Treasury bond yields are trading in positive territory, with the 10-year note coupon yielding 4.337% amidst a US 20-year bond auction, while the Greenback, as shown by the US Dollar Index , is firm at around 105.12. Across the border, the Mexican economic docket revealed a poll by the Instituto Nacional de Estadisitca Geografia e Informatica , which shows the economy likely grew 3.4% in August compared with the same month a year earlier, in a preliminary estimate from the statistics agency.At the beginning of the week, the USD/MXN could not crack the 100-DMA at 17.2091, opening the door for a pullback, which witnessed the pair breaching the 20-DMA at 17.1075.
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