Mexican Peso rallies to two-year high on US Treasury buyback

The Mexican Peso achieved a two-year high at 16.94 against the US Dollar as the USD weakened, following the US Treasury's expansion of its long-duration bond buyback. The USD/MXN pair traded at 16.95, down 0.27%. Despite uncertainty surrounding the US-Iran conflict, market sentiment improved. Iran's Deputy Parliament Speaker stated that the Strait of Hormuz belongs to Iran, while another official dismissed US President Trump's threats against Iran as illogical.

The Federal Reserve is expected to release its final meeting minutes around 18:00 GMT, along with Initial Jobless Claims, St. Louis Fed President Alberto Musalem's speech, and S&P Global Flash PMIs. Traders are watching Banxico's minutes from their last meeting and Retail Sales data for Friday. Estimates suggest a 0.1% month-over-month increase in June retail sales, compared to a 0.6% decline in May.

The Peso benefited from the US decision to postpone 50% tariffs on Canada, according to Janneth Quiroz, Monex's Director of Economic Analysis. The weekly chart shows USD/MXN trading at 16.9672, breaking below longer-term simple moving averages and facing resistance at the 17.0058 level. The Relative Strength Index (14) remains below the neutral 50 line, indicating continued downside pressure.

The Mexican Peso is influenced by factors such as the Mexican economy, its central bank's policies, foreign investment, and remittances from Mexicans living abroad. Geopolitical factors and oil prices also impact the Peso, as Mexico is a significant exporter of the commodity. The central bank aims to keep inflation at low and stable levels, adjusting interest rates accordingly.

Macroeconomic data releases are crucial in assessing the economy's health and can positively or negatively affect the Peso's value.