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Broad Greenback Strength Further Bolsters USDMXN

MEXICO
  • USDMXN (+0.52%) is extending on last week’s gains and despite the recovery being considered technically corrective, the pair continues to narrow the gap with key resistance at 17.4280, the Aug 4 high. A clear break of this hurdle is required to highlight a potential short-term reversal and open 17.7714, the May 31 high.
  • As a reminder, Bloomberg reported late on Monday that the government’s draft 2024 budget is expected to include a capital allocation to Pemex to pay maturing debts that have surpassed $11 billion, according to people with knowledge of the matter. The article suggests the inclusion of Pemex’s maturing debt in the budget would be a bid to ease concerns in the market about the management of the oil company’s finances, one of the people said. For reference, Mexico's finance ministry is scheduled to present the draft budget this coming Friday.
  • The key events in Mexico this week will be the Morena governing coalition announcing its presidential candidate on Wednesday and Thursday’s release of August CPI.

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