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USD/MXN climbs 0.43% as US employment strength dampens hopes for imminent Fed rate reductions, boosting the Greenback. 10-year US Treasury yield hits a high of 4.801%, adding pressure on emerging market currencies like the Mexican Peso. Economic forecasts are bleak for Mexico with potential recession and credit rating concerns despite some positive industrial data. The Mexican Peso prolongs its agony against the US Dollar, dropping for the fifth consecutive session on Monday amid a risk-off impulse following a robust US employment report that might deter the US Federal Reserve (Fed) from cutting interest rates. The USD/MXN trades at 20.80, up 0.43%. Market participants remain risk-averse after last week’s Nonfarm Payrolls (NFP) report for December showed a jump in hiring. Consequently, the Greenback advanced as traders grew less optimistic that the Fed would lower interest rates anytime soon. Besides this, US Treasury yields remained elevated with the 10-year T-note reaching 4.801% for the first time since November 2023. Mexico’s economic docket remains absent, yet industrial production has improved in monthly and annual figures. However, the economy is not out of the woods yet. Former Deputy Finance Minister Alejandro Werner said in an article by El Economista that the Mexican economy would enter a recession this year and could lose its investment-grade status before 2027. This week, Mexico’s docket will feature Gross Fixed Investment and Retail Sales reports. In the US, key data releases include inflation figures on the producer and consumer sides, alongside Retail Sales and jobless claims for the week ending January 11. Daily digest market movers: Mexican Peso drops as traders flee to safety The Mexican Peso weakened last Friday after December’s NFP said the US economy added over 256K employees to the workforce. Estimates were around 160K, and November’s figures were revised to 212K from 227K. The Unemployment…

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Filed under: News - @ January 13, 2025 7:25 pm