- USD/MXN has defended its crucial support of 18.00 amid a recovery in the USD Index.
- US consumer spending is to be impacted this year amid fears of a recession and tremors in the banking industry.
- A 25bp rate hike is expected from Banxico to 11.25%.
The USD/MXN has witnessed a marginal decline to near 18.10 in the Asian session after a recovery move. The asset has defended the psychological support of 18.00 amid a recovery move by the US Dollar Index (DXY). The USD Index is juggling near the previous day's high around 102.77. The mighty USD is gathering strength to deliver a break above the same in hopes that the Federal Reserve (Fed) will hike rates one more time this year.
S&P500 futures have trimmed losses shown in the Asian session, portraying further improvement in the risk appetite of the market participants. Receding fears of further casualty in the US banking system have weighed on demand for US government bonds. Eventually, the 10-year US Treasury yields jumped to 3.58%.
Going forward, the release of the United States core Personal Consumption Expenditure (PCE) Price Index data will remain in the spotlight, which is scheduled for Friday. As per the consensus, households’ spending increased by 0.4% in February lower than the prior escalation of 0.6%. The annual core PCE price index is expected to remain steady at 4.7%.
The National Retail Federation (NRF) said on Wednesday that fears of a recession and tremors in the banking industry cast a shadow over a recovery in consumer spending, as reported by Reuters. The NRF is expecting a growth in retail demand in the 4-6% range, lower than expansion by 7% recorded in 2022. Therefore, chances of a better-than-anticipated core PCE are less likely.
On the Mexican Peso front, investors are awaiting the interest rate decision by the Bank of Mexico (Banxico). As per the consensus, Banxico will hike interest rates further by 25 basis points (bps) to 11.25%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.