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USDMXN Approaching YTD Highs, New Migration Measures Agreed With US

MEXICO
  • As noted, the Mexican peso is underperforming EM FX early on Tuesday, trading ~0.6% weaker against the dollar, with USDMXN currently consolidating just below 17.30. Overall, the pair’s climb is considered corrective, although most recent price action does suggest scope for a bullish continuation near-term, exposing resistance at 17.5653, the Dec 5 high.
  • Last night, the Citi Banamex survey revealed that most analysts expect Banxico to cut its policy rate by 25bp in March. The year end policy rate forecast was unchanged at 9.25% and the end 2025 estimate was held at 7.5%. Meanwhile, Foreign Affairs Minister Barcena said yesterday that Mexico will ramp up deportation flights to locations such as Guatemala, Venezuela, and Honduras, after bilateral migration talks were recently held with US officials in Washington. Mexico will also provide developments assistance to those countries receiving migrants.
  • On the data front today, Mexico weekly international reserves will be published at 1500GMT(1000ET), while ANTAD same store sales figures for December are released at 1700GMT (prior +5.3% y/y).

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