- USD/MXN attracts some buyers above the 18.00 zone on Wednesday amid stronger USD.
- The JOLTS index of job openings in the US exceeded expectations.
- Negative data from Mexico puts pressure on the Mexican Peso.
- On Wednesday, markets will closely monitor the ADP employment change report and the US ISM services PMI.
The US Dollar (USD) gains ground against the Mexican Peso (MXN) at the start of the European session on Wednesday. Dollar recovery, rising US Treasury yields and encouraging US data boost the pair. Currently, the USD/MXN pair is trading around 18.16, which is up 0.49% on the day.
For its part, the DXY Dollar Index, which measures the value of the Dollar in relation to a basket of six major currencies, rebounds to 107.10, the highest level since November last year. US Treasury yields also rose on Wednesday, with the 10-year bond yield remaining at 4.83%, the highest level since 2007.
On Tuesday, the US Bureau of Labor Statistics (BLS) revealed in the Job Openings and Labor Turnover Survey (JOLTS) that the number of job openings for August stood at 9.6 million, up from 8.9 million (revised from 8.8 million) from the previous reading. The figure far exceeded expectations of 8.8 million.
On Tuesday, Cleveland Federal Reserve President Loretta Mester stated that she is likely to favor an interest rate hike at the next meeting if the current economic situation holds, while mentioning that it is likely that the Fed is at or near the maximum for the interest rate target. For his part, the president of the Atlanta Fed, Raphael Bostic, stated that he will be patient and that it is not urgent to do anything more.
On the other hand, the S&P Global manufacturing PMI index for September stood at 49.8 points, compared to the previous reading of 51.2 points. The figure fell into contraction territory and weighed on the pair. Data aside, Mexico’s interest rates are expected to remain at 11.25%, according to a recent Banxico survey,
Looking ahead, markets will closely monitor US employment developments with the ADP Employment Change Report and the ISM Services PMI due to be released during the American session on Wednesday. The focus will be on Friday’s expected US nonfarm payrolls. These events could give clear direction to the USD/MXN pair.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
