USD MXN

Despite a reversal from two-year highs last week, bulls have continued to push in USD/MXN although the pair is notably lagging EUR/USD and USD/JPY for pricing in USD-strength over the past week.

The sustainability of the US disinflationary trajectory towards the Fed’s 2% inflation target will be tested today with the release of the June CPI indicator

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While USD strength has been the rage in many FX markets, the same can’t be said in USD/MXN where Banxico rates have kept the carry driving the short side of the pair for much of the past two years. But now there’s the threat of reversal.

Our longer-term gold forecast remains positive, owing to the fact global monetary policy can only start to loosen from here

Our longer-term gold forecast remains positive, owing to the fact global monetary policy can only start to loosen from here

Mexico’s mid-month CPI showed that inflation seems to be leveling off. However, the rate is still excessively high.

With inflation on the rise once again in Mexico, will Banxico deliver a hawkish 25bps hike?

Banxico has been hiking rates at the same pace as the Fed since the beginning of summer, most recently with a 75bps rate hike last week.

Mexico’s CPI continues to climb. As such, so does the value of the Peso.

The headline mid-month inflation rate for July is 8.16% YoY , led primarily by rising food costs. This is the highest level of inflation in 21 years!

It is worth watching EM currencies closely here as there is a risk we could see further, sharp, selling, which, in turn, could provide a fresh source of threat to the global financial markets.

Will USD/MXN continue lower? It may depend on whether the central bank decides to hike another 75bps at its August meeting!

Will USD/MXN continue lower? It may depend on whether the central bank decides to hike another 75bps at its August meeting!

Both a hawkish Bank of Mexico and the rise in Crude Oil prices have been pushing USD/MXN lower.

USD/MXN is caught between a long-term support zone and the downward sloping trendline of a long-term descending triangle.

The Central Bank of Mexico increased interest rates by 50bps and revised its inflation forecasts higher. However, it seems that USD/MXN traders were already expecting it!