USD/MXN Edges Closer to 16.60 Before Release of Mexico’s Jobless Rate and Trade Balance Data

• USD/MXN inches higher towards 16.60 before Mexico’s Jobless Rate and Trade Balance data.
• The decrease in US Treasury yields may temper the US Dollar’s rise.
• Banxico Governor Victoria Rodriguez Ceja underscores the ongoing battle against inflation.
• USD/MXN is recovering from recent losses, edging closer to 16.60 amid European trading hours on Wednesday as traders await Mexico’s Jobless Rate and Trade Balance figures.

INEGI’s gauge of Mexican economic activity shows growth, though slightly below expectations. This trend suggests the Mexican economy’s vulnerability to Banxico’s interest rate policies.

Banxico Governor Victoria Rodriguez Ceja maintains a cautious stance, emphasizing the ongoing fight against inflation. Discussions on potential rate cuts remain on the agenda for upcoming meetings.

The US Dollar Index (DXY) extends gains, hovering around 104.40, supported by market risk aversion. US Treasury bond yields, however, stand at 4.59% and 4.22% for the 2-year and 10-year bonds, respectively.

Atlanta Fed President Raphael Bostic anticipates one rate cut this year, urging against premature reductions. Conversely, Chicago Fed President Austan Goolsbee aligns with the majority, forecasting three cuts.

Market sentiment remains cautious ahead of the US Gross Domestic Product Annualized and Personal Consumption Expenditures data released later in the week.

USD/MXN