USD/MXN dives to new seven-year low on US Dollar weakness, post-US inflation data – by christianborjon USDMXN Currencies EmergingMarkets
, dropping 0.8% from April’s 4.9% to 4% YoY. Additionally, excluding volatile items like food and energy, also known as Core CPI, edged lower, 0.2% to 5.3% YoY, aligned with estimates. However, core CPI month-over-month remained unchanged for the second straight month, indicating that inflation still lingers in the economy., which measures the buck’s value against a basket of its rivals, dives 0.27% at 103.347 after hitting three-week lows.
That said, Wall Street expects the Fed to pause in June but is likely to resume in July, according to the latest figures reported by the CME FedWatch Tool. Money market futures odds for a quarter percentage increase to the Federal Funds Rate are 62.5% and continue to aim up compared to the last week.
In tomorrow’s Federal Reserve Open Market Committee meeting, the Federal Reserve will also update the Summary of Economic Projections and the Dot-Plot, which is foreseen to cement the Fed’s hawkish stance, not as a dovish pivot. Across the border, the Mexican economic docket was absent. Still, the latest remarks by the Bank of Mexico Governors, Victoria Rodriguez Ceja and Jonathan Heath, stressed the need to hold higher rates for at least two meetings.On Wednesday, the US economic agenda will feature May’s Producer Price Index , the FOMC’s decision, and Fed’s Chair Jerome Powell’s press conference.The USD/MXN is set to continue to drop further, pending decisively cracking the 17.
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