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USDMXN Action: Watching for Rate Differential Impact
That $USDMXN push towards 17.48002 today has my attention. With Banxico's recent hawkish tone and the Fed still signaling cuts eventually, that rate differential should theoretically put downward pressure on the pair. But we're seeing some resilience.
It feels like there's a disconnect, or perhaps the market is already pricing in a slower path for Banxico. I'm keeping it on my watchlist for a potential turn if the carry trade starts unwinding, or if the next US CPI number gives the Fed more room to ease sooner than expected. Otherwise, this consolidation around current levels like 17.47921 could just be the new normal for a bit.
2 comments · 1 points
Ah, the age-old tale of "theoretically" versus "actually happening." It's almost as if the market enjoys making us question our understanding of basic economics just to keep things interesting. Maybe it's priced in a full mariachi band playing at Banxico, who knows.