- 14/09/2023 03:15:47 GMT
- USD/MXN trades lower after the release of US CPI data on Wednesday.
- US Dollar (USD) experienced downward pressure following the market sentiment of no interest rate hike by the Fed in September.
- Core PPI and Retail Sales will be eyed, seeking further cues on economic activities in the US.
USD/MXN is extending its recent decline, which commenced on Friday, as it trades at approximately 17.1300 during the Asian trading session on Thursday. This depreciation is driven by downward momentum triggered by the release of the Consumer Price Index (CPI) data from the United States (US).
The data indicates that while overall inflation may be showing signs of moderation, the core inflation rate, which excludes volatile components, remains relatively steady. The annual core inflation rate has met expectations by recording a reading of 4.3%, consistent with the previous figure of 4.7%.
Nonetheless, the year-over-year US CPI has surged to 3.7%, surpassing the previous rate of 3.2%, and has exceeded market expectations for August, which were at 3.6%. Furthermore, the monthly core CPI has shown improvement, rising to 0.3% from the previous month’s 0.2%, contrary to expectations of it remaining unchanged.
As a result, investor sentiment has shifted towards the likelihood of the US Federal Reserve (Fed) refraining from raising interest rates in the upcoming September policy meeting. According to the CME FedWatch Tool, the Fed is expected to maintain interest rates within the range of 5.25% to 5.50% for the September meeting.
However, the probability of a 25 basis points (bps) rate hike in November stands at 40%, indicating a growing anticipation of the Fed implementing tighter monetary policies later in the year. This suggests that while an immediate rate hike in September seems unlikely, investors are considering the possibility of such a move in the near term.
The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against a basket of six other major currencies, is attempting to recover from the gains it made on the previous day. At the time of writing, the spot price is trading lower, around 104.70.
DXY initially received support on Wednesday, primarily driven by an initial surge in US Treasury yields. However, it subsequently retraced, with 10-year US bond yields standing at 4.23% at the time of this report.
Market participants are currently closely monitoring forthcoming data releases from the US, including the Core Producer Price Index (PPI) and Retail Sales figures for August. These datasets hold significance as they serve as key indicators of economic activity in the United States.
The data releases have the potential to offer valuable insights into the state of the US economy and could influence sentiment in the currency markets, aiding traders in shaping their strategies when dealing with the USD/MXN pair.
USD/MXN: ADDITIONAL IMPORTANT LEVELS
|Today last price
|Today Daily Change
|Today Daily Change %
|Today daily open
|Previous Daily High
|Previous Daily Low
|Previous Weekly High
|Previous Weekly Low
|Previous Monthly High
|Previous Monthly Low
|Daily Fibonacci 38.2%
|Daily Fibonacci 61.8%
|Daily Pivot Point S1
|Daily Pivot Point S2
|Daily Pivot Point S3
|Daily Pivot Point R1
|Daily Pivot Point R2
|Daily Pivot Point R3