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Peso Consolidates Strong Tuesday Advance

MEXICO
  • Tuesday’s optimism across global markets and the softer greenback bolstered the Mexican peso significantly, prompting USDMXN to decline around 1.5% and reestablish itself below the 18.00 handle. Price action has narrowed the gap with initial support is at the 20-day exponential moving average which intersects today at 17.7000. Lower down, key support has been defined at 17.3498, the Sep 29 low.
  • An update on the local political agenda for today - Presidential candidate Xochitl Galvez meets with Mexican industrial chamber Concamin, while ruling party candidate Claudia Sheinbaum visits Matamoros, Coahuila.
  • On Thursday, manufacturing and industrial production data for August will cross as well as the central bank minutes from the September policy decision. While Banxico confirmed unanimous expectations and held the policy rate at 11.25%, analysts will evaluate the minutes for any clues on the set of requirements that would be necessary to validate rate cuts.

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