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USDMXN Drifts Higher With Souring Risk, Respects Recent Range

MEXICO
  • Local markets are reopening after the Independence Day holiday on Friday.
  • USDMXN’s sharp rebound last Tuesday highlight the attempted break of support at 19.8126, the Aug 15 low, has failed. A continuation higher would further undermine a recent bearish threat and expose resistance at 20.2944, the Sep 1 high. On the downside, a break of Monday’s low of 19.7533, the Sep 12 low, would reinstate a bearish theme.
  • Aside from the FOMC meeting, domestic focus will be on Wednesday’s July retail sales report and Thursday’s release of Mid-September Bi-Weekly CPI.
  • Annual core inflation is expected to increase to 8.31% and this will be the final reading before next week’s central bank decision where Banxico are widely expected to follow the Fed with a 75bp rate increase to 9.25%.

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