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Peso Partially Recovers Sharp Tuesday Retreat

MEXICO
  • USDMXN rose around 2% on Tuesday as US yields surged, weighing on the EM basket. Despite the sharp turnaround in risk following the safe landing of Speaker Pelosi in Taiwan, pressure across the US Treasuries curve boosted the greenback weighing on all regional currencies.
    • Despite the sharp move higher in USDMXN, the pair has retraced around 0.75% of the move on Wednesday and the key technical resistance point for any resumption of bullish conditions remains at 21.0535, the Jul 14 high.
  • Wednesday marks the second day of public hearings on the USMCA disagreement over rules of origin; to be streamed from Washington.
  • On Tuesday at his daily press briefing, President AMLO said he is sending a letter to US President Joe Biden regarding the energy dispute.
  • Consumer confidence data crosses on Thursday, however, firm focus will be on Friday’s US jobs report and then turn to next week’s Banxico decision/statement.

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