The Mexican peso reversed course on Tuesday, falling 0.60% against the US dollar as the greenback firmed against a basket of six currencies via the US Dollar Index (DXY). USD/MXN traded around 18.68 after touching 18.54, with the move linked to carry-trade unwinding as major central banks lean towards further rate rises in a high-inflation backdrop. Markets are also watching the US–Mexico rate differential, which is expected to narrow after the Federal Reserve lifted rates by 25 bps to 3.75%–4% last September while Banco de México held policy steady.
Mexican Trade and Political Developments
Mexican data showed a September trade surplus of $1.069 billion, down from $3.489 billion in August, while political pressure has built around the National Electoral Institute following the resignation of its former president, Guadalupe Taddei, amid corruption allegations.
US Economic Indicators and Market Outlook
In the US, Conference Board consumer confidence rose to 91.7 from 82.2, and durable goods orders grew 1.8% versus 0.1% in September, while ADP employment rose 16.8K compared with 17.5K previously. Money markets price a Fed hold on Wednesday, then an 82% chance of a December hike, while technical levels include spot at 18.6816, the 50/100/200-day SMA cluster near 17.64, RSI (14) at 68.9, and lower support at 16.89.
