USD/MXN bids lower near 17.18, Mexico inflation data eyed

USD/MXN extends its losses on the second successive session, bidding lower around 17.18 during the early European hours on Thursday. The Mexican Peso (MXN) experienced volatility following the upward revision of inflation expectations by American households. This development led to a surge in Treasury bond yields in the United States (US), which might have provided support for the US Dollar (USD).

The University of Michigan Consumer Sentiment poll revealed that inflation expectations, rose for one year to 4.5% from 4.4% in the previous report, while it stood at 3.2% for a five-year period. Moreover, However, US Durable Goods Orders in October declined by 5.4% against the market consensus of 3.1%. US Jobless Claims reported a larger-than-anticipated decline for the week ending on November 17, with reducing to 209K from 233K prior.

Looking at the flip side, Mexico experienced a 2.3% year-on-year growth in Retail Sales for September. This marked a deceleration from the 3.2% growth observed in August and fell short of the anticipated 3.6% expansion. The numbers are starting to reflect the influence of the elevated interest rates imposed by the Bank of Mexico (Banxico), which currently stands at 11.25%.

Furthermore, the initial projections reported by Reuters indicate a 2.9% year-on-year growth for Mexico's economy in October. Looking ahead, Thursday's forecast predicts a rise in the first half-month inflation for November, although there's an expectation of a slight dip in core inflation. Furthermore, Friday will unveil the annual rate of Gross Domestic Product, with an anticipated contraction in the third quarter.

US markets will be taking a break on Thursday for Thanksgiving Day on Thursday. Come Friday, the US is scheduled to unveil the S&P Global Manufacturing and Services PMI figures for November,  expecting a potential decrease in both indices.