- Mexican Peso stalled the USD/MXN rally towards 18.00, as the pair clings to losses of 0.02%.
- The University of Michigan consumer sentiment indicates growing pessimism amongst Americans as inflation expectations arise.
- Dovish comments from Fed officials, including Philadelphia Fed President Patrick Harker, suggest a rate hike pause.
Mexican Peso (MXN) halted the US Dollar (USD) advance on Friday after Thursday’s inflation report from the United States (US) spurred an overreaction in the financial markets in concerns the US Federal Reserve (Fed) could hike rates again. However, recent dovish comments by Fed officials capped the US Dollar advance, benefiting the emerging market currency, as the USD/MXN trades at around 17.94, down 0.17%.
Thursday’s US inflation report exceeded estimates, spurring investors to price in a possible rate hike of the US central bank. Nevertheless, dovish commentaries since Monday suggest the Fed is almost done raising rates, a stance gaining more adepts; as Philadelphia Fed President Patrick Harker said recently, the “Fed is likely to be done with rate hikes.” On the data front, the University of Michigan (UoM) consumer sentiment shows Americans turning pessimistic while revising its inflation prospects upward. Mexico’s economic docket is absent, leaving traders adrift to US Dollar dynamics and risk sentiment, deteriorating as Wall Street posts losses.
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