- USD/MXN gains ground as US Jobless Claims soar, Mexican inflation dips.
- Speculation of Banxico pausing tightening cycle boosts USD/MXN advance.
- Market eyeing US inflation data release, FOMC meeting amid global rate decision woes.
After falling to seven-year lows on Wednesday, the USD/MXN staged a comeback on Thursday, though it could be short-lived as the Asian session begins. The USD/MXN is trading at 17.3633, down 0.09%, after finishing Thursday’s session positive, with modest gains of 0.12%.
Peso-Dollar pair reacts as inflation cools down in Mexico
Wall Street closed the session with solid gains. The USD/MXN advanced on data from both countries, which underpinned the pair, as inflation in Mexico dipped below estimates. According to the Instituto Nacional de Estadistica, Geografia e Informatica (INEGI), the Consumer Price Index (CPI) in May fell -0.22% MoM, well below estimates of -0.16%. Annually based, CPI fell below the prior’s month 6.29%, at 5.84%, beneath the consensus of 5.9%.
Across the border, the US Bureau of Labor Statistics (BLS) featured Initial Jobless Claims for the last week ending June 3 jumped 261K, up from 232K expected by analysts, the highest since October 2021. That adds to an outstanding Nonfarm Payrolls report last Friday, which showed the economy created 339K jobs, but the rise in the Unemployment Rate was a prelude to the previous week’s data.
Following both releases, the USD/MXN advanced from around the 17.3500 figure towards the daily high at 17.4426 on speculations of a pause of the Bank of Mexico (Banxico) tightening cycle. Regarding the US Federal Reserve (Fed), comments in the last week cemented the case for skipping raising rates in June and waiting for July.
However, the latest monetary policy decisions by the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) sparked concerns about what the Fed will do. Given that the RBA and the BoC kept rates on hold, inflation has resumed its upward path in some meetings. That triggered a reaction by both institutions.
Upcoming events
The US calendar is empty, with traders eyeing Tuesday, June 13, with the release of inflation data, alongside the beginning of the FOMC’s meeting.
USD/MXN Price Analysis: Technical outlook
The daily chart portrays the USD/MXN pair as downward biased, though it appears to be bottoming. Although that has been commented on in previous articles, it should be taken cautiously. A double bottom could be forming, but it would need to claim two daily EMAs, the 20 and 50-day period, each at 17.5851 and 17.8217, before challenging resistance at a May 23 high of 17.99. Once cleared, the following supply area to test would be the 100-day EMA at 18.1741. Conversely, the pair could continue printing new multi-year lows below the current YTD low at 17.30.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.