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USDMXN Consolidates Near One-Month Lows as Election Approaches

MEXICO
  • Buoyant risk sentiment and the associated broad dollar weakness on Wednesday eventually prompted a substantial move lower for USDMXN. In the process, USDMXN breached last Friday’s low and traded down to a one-month low around 16.65. The pair trades modestly higher overnight, however, a bearish theme remains in place paving the way for a move towards 16.50 initially and 16.2616, the Apr 9 low and a key support.
  • Ahead of the June 02 election, the ruling party presidential candidate, Claudia Sheinbaum, outlined some of her intentions while speaking to the press Wednesday. She noted the strength of local consumption will support the Mexican economy in 2025 even if the US economy cools down. There are also plans to strengthen activity through a housing development plan, increased infrastructure projects and the maintenance of strong FDI into Mexico. Sheinbaum’s team are also said to be working on a long term plan for Pemex, which would support a debt refinancing plan.
  • Separately, President AMLO announced on Wednesday that his administration will authorize an average increase of 10% of annual salaries for teachers of basic general education.

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