- Mexican Peso remains weaker despite positive economic data.
- Banxico expected to keep rates unchanged with Citibanamex survey indicating most economists forecast no rate cut until Q3 2024.
- US data shows higher than expected Q1 GDP, lower unemployment claims, and stronger Durable Goods Orders, boosting USD.
The Mexican Peso prints minimal losses in early trading during the North American session as traders brace for the monetary policy decision of the Bank of Mexico (Banxico), scheduled for 19:00 GMT. At the time of writing, the USD/MXN trades at 18.39, up by 0.36%.
Mexico’s economic data fared better than foreseen with the Unemployment Rate coming in below estimates, while the Balance of Trade printed a surprisingly surplus. Despite that, the Mexican currency remained slightly weaker against the US Dollar (USD).
Later, Banxico is expected to keep rates unchanged, based on the latest Citibanamex survey published on June 20. Of the 31 economists polled, just nine expect a rate cut to 10.75% later, while the other 22 market participants moved their projections to the third quarter of 2024.
Across the border, mixed data in the United States (US) boosted the Greenback against most emerging market currencies but dropping against most G7 currencies. The final reading of the Gross Domestic Product (GDP) for Q1 2024 was higher than expected, unemployment claims dipped, and Durable Goods Orders exceeded forecasts.
Therefore, the USD/MXN resumed to the upside, but it remains subject to Banxico’s decision. A hold could spark a U-turn and open the door to challenge the April 19 high turned support at 18.15. Further downside would be seen, once cleared.
Otherwise, if Banxico eases policy, the exotic pair might challenge the year-to-date (YTD) high of 18.99, with further gains seen once the level is cleared.
