USD/MXN recovers on elevated US inflation expectations
The US Dollar gained in most pairs, including versus the Mexican Peso, after data from the Reserve Bank of New York showed a rise in inflation expectations which reinforced the inflationary outlook presented in Friday’s Michigan sentiment survey.
The NY Survey of Consumer Expectations showed consumer inflation expectations for one year ahead increased to 3.3% in April, from 3.0% in March – and the three previous months. It was the highest level since November and stands well above the Federal Reserve’s 2.0% target.
The data further reduces the chance of the Fed moving to cut interest rates in the near future, which is positive for the USD since an expectation of higher interest rates increases foreign capital inflows
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