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The Mexican Peso picks up from lows as the US Dollar pulls following US PCE inflation data. The MXN bounced up on Thursday after Banxico confirmed expectations and cut interest rates by 25 bps. USD/MXN gives away gains and approaches the key 20.00 support area again. The Mexican Peso (MXN) is trading on a stronger note against the US Dollar (USD) on Friday, regaining some of the ground lost following a ”hawkish cut” by the Federal Reserve (Fed) on Wednesday. The softer-than-expected US Personal Consumption Expenditures (PCE) Prices index figures in the US have added selling pressure on the US Dollar. The Peso bounced up from two-week lows on Thursday after the Bank of Mexico (Banxico) confirmed investors’ expectations and cut rates by 25 basis points (bps) to close the year at 10%.  The central bank’s statement warned about the negative impact of higher tariffs in the US and observes that the labour market loosened. Inflation has cooled and is expected to continue that way, which will allow the bank to ease its monetary policy further next year. Today, the focus is on the US Personal Consumption Expenditures (PCE) Prices Index, which is expected to confirm that inflation remains sticky at levels above the Fed’s 2% rate. An upside surprise today would cast further doubt on the Fed’s easing cycle and provide additional support for the US Dollar. A mild US Dollar pullback is providing support to the MXN US inflation measured by the PCE Prices index ticked up 0.1% in November, against expectations of a 0.2% increment. The yearly rate accelerated to a 2.4% pace from the previous month’s 2.3%, below the 2.5% anticipated by the market consensus.  The Core PCE, more relevant in terms of monetary policy expectations, slowed down to 0.1% from 0.3% in October, beyond the 0.2% expected. The yearly rate remained…

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Filed under: News - @ December 20, 2024 3:24 pm