August 10, 2022 11:40 GMT
- USDMXN is pinned to the most recent lows ahead of the US CPI data amid broad greenback weakness to start the Wednesday’s session.
- The reversal lower from 20.8335 signals scope for a deeper pullback and attention is on support at 20.2080, the Jul 29 low. This support continues to be tested and a clear break would strengthen bearish conditions and open the 20.00 handle.
- Banxico are 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 hawkish stance 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://roar-assets-auto.rbl.ms/documents/17889/MNI%20Banxico%20Preview%20-%20August%202022.pdf
- President AMLO detailed plans to further deepen the military’s role in Mexican life, boosting efforts to bring the national guard under the control of the Defense Ministry.