Mexican Peso suffer sharp losses as US inflation boosts the Dollar
The Mexican Peso depreciates versus the US Dollar, down some 0.65% on the heels of hot US inflation data, fueling bets that the Federal Reserve could raise rates at the October meeting. The USD/MXN trades at 18.51, after bouncing off daily lows of 18.35.
The Mexican Peso experienced a sharp decline against the US Dollar due to rising US inflation figures, sparking speculation of an interest rate hike by the Federal Reserve during the October meeting. The USD/MXN pair is currently trading at 18.51 after bouncing back from a low of 18.35. The US CPI surpassed forecasts in September, reaching 3.7% year-over-year and 0.6% month-over-month, primarily driven by surging gasoline, diesel, and food prices.
Core CPI expanded from 2.4% to 2.6% year-over-year, also exceeding expectations. Investors have raised their expectations of a rate increase to 42% for the October meeting, up from 22% the previous day. Fed officials, including Austan Goolsbee, Thomas Barkin, and John Williams, have expressed concerns over the overheating CPI data, hinting at a potential rate hike in the coming months.
The US economic data schedule includes the Producer Price Index (PPI), Retail Sales, Initial Jobless Claims, and additional Fed speeches. The technical analysis suggests a bullish near-term bias for USD/MXN, with price action above key support levels, while overbought conditions may lead to a temporary consolidation before further upside.
Factors such as the Mexican economy's performance, Banxico's interest rate decisions, macroeconomic data releases, and geopolitical trends influence the Mexican Peso's valuation.
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