August 11, 2022 11:05 GMT
- In line with broad US dollar weakness following yesterday’s data, USDMXN has continued to trade with a heavy tone. Firmer equity indices have bolstered the Peso strength which saw USDMXN print fresh recent lows of 19.9134 late on Wednesday.
- Technically the pair has cleared support at 20.2080, the Jul 29 low suggesting an initial move to 19.8193 next, the Jun 27 low. Key short-term resistance has been defined at 20.8335, the Aug 3 high. Initial resistance is at 20.5004, the Aug 4 high.
- Data just released:
- June Industrial Production rises 0.1% m/m; est. -0.1% (BBG)
- June Industrial Production rises 3.8% y/y; est. +3.9% (BBG)
- June Mfg Production rises 5.1% y/y; est. +5.0% (BBG)
- The central bank board is unanimously expected to raise the overnight target rate by 75bps from 7.75 to 8.50% at the August meeting.
- Ongoing pressures to headline and core inflation, rising inflation expectations and the Fed’s most recent monetary policy action all warrant a continuation of the aggressive pace of tightening.
- Focus will be on any signals within the statement regarding the depth of the current cycle and whether a hike of the same magnitude can be expected in September.
- Link to view the full MNI preview with analyst views: https://marketnews.com/mni-banxico-preview-august-2022-keeping-pace-with-the-fed