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USDMXN Continues Grind Lower

MEXICO
  • In line with the softer greenback and more stable risk backdrop, USDMXN has been edging lower on Wednesday, extending the peso’s recovery from Monday. Price has now slipped back below initial support of the 50-day EMA and is closing in on the pivotal 18.50 mark.
  • On Tuesday, Citi published the results of its latest biweekly analysts survey. Forecasters are expecting the next rate move to be a 25bp increase next week and 2023 year-end expectations for the overnight rate remained at 11.50%.
    • Both 2023 and 2024 year-end CPI projections were revised down to 5.20% and 4.03% respectively.
  • Data just released showed aggregate supply and demand rose 4.1% y/y (estimate +4.3%) in 4Q versus +6.4% in 3Q, according to Inegi.
  • January retail sales data and bi-weekly CPI will both be released on Thursday, which precedes January economic activity data on Friday.

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