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USD/MXN Holds Above 20.35, Sustaining its Near-Term Bullish Bias

MEXICO
  • USD/MXN trades +0.01% higher this morning, broadly tracking the BBDXY in early trading.
  • The cross maintained its bullish near-term bias in yesterday's session, closing above 20.35 as hawkish comments from Bullard and Kaplan rattled EM FX sentiment ahead of what markets expect to be an uneventful JH meeting with Powell striking a careful balance between doves and hawks on the panel RE taper timelines.
  • Additionally, the Banxico minutes conveyed a slightly more dovish picture than anticipated by the sell-side with a lack of commitment to further tightening and uncertainty over countering the path of inflation resulting in a slightly more dovish set of minutes on the margins.
  • Oil markets trade notably firmer this morning as hurricane risks in the Gulf force refineries to close – capping off a strong week for Brent & WTI (+10.5% w/w).
  • Focus today will be on trade balance data, expected to moderate, and Fed Chair Powell's testimony with markets focused on possible taper details and signs of concern over the delta variant.
  • Intraday Sup1: 20.30, Sup2: 20.2469, Res1: 20.4285, Res2: 20.4981
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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