USD/MXN rebounds to near 16.60 ahead of ISM Services PMI data
- USD/MXN edges higher ahead of key economic data from the United States.
- Mexico’s Business Confidence remained consistent at 54.3 in February.
- The US Dollar could appreciate due to reducing expectations for a Fed interest rate cut in June.
USD/MXN rises to near 16.60 during the European trading hours on Wednesday. The National Statistics Agency (INEGI) reported that Business Confidence remained unchanged at 54.3 in February, maintaining high levels last seen nearly eleven years ago. However, investment prospects improved to 48.5 from 47.2, though they remain pessimistic.
The Mexican Peso (MXN) strengthened as growth in Mexico's manufacturing sector remained steady in March, contributing to undermining the USD/MXN pair. Traders will be closely monitoring the release of Gross Fixed Investment figures on Wednesday, followed by the publication of the latest meeting minutes for the Bank of Mexico (Banxico).
The steady performance of the US Dollar (USD) is contributing to the hawkish price action of the USD/MXN pair. Market sentiment is shifting, with reduced expectations for a Federal Reserve (Fed) interest rate cut in June. This has led to elevated US Treasury bond yields, favoring USD bulls.
On Tuesday, US February JOLTS Job Openings surpassed market expectations, rising to 8.756 million from the previous figure of 8.748 million. Additionally, Factory Orders rebounded with a 1.4% month-on-month increase in February, following a 3.8% decline in the prior reading.
In the United States (US), investors are focusing on the ADP Employment Change and ISM Services PMI data scheduled for release on Wednesday. Furthermore, Federal Reserve Chairman Jerome Powell is scheduled to deliver a speech on the US economic outlook at the Stanford Business, Government, and Society Forum in Stanford.