USD/MXN weakens on hawkish Banxico minutes, hovers around 17.17

• USD/MXN faces a challenge as the Fed is expected to have ended policy-tightening.
• The recent hawkish FOMC minutes might have limited the losses of the US Dollar.
• Banxico minutes revealed the importance of keeping rates higher to bring inflation to its target.

USD/MXN continues the losing streak for the third session, trading lower near 17.17 during the European hours on Friday. The USD/MXN pair receives downward pressure as market participants seem convinced that the Federal Reserve (Fed) has concluded its policy-tightening campaign.

The prevailing cautious sentiment has cast a negative shadow on the US Dollar in anticipation of Friday's release of the US S&P Global PMI data, which is expected to show a slight decline in November. The market is closely watching these figures for insights into the performance of key sectors in the US economy, contributing to the current cautious stance on the Greenback.

US Treasury yields have exhibited improvement during the Asian session on Friday, following the Thanksgiving Holiday in the United States, in an attempt to shift the Greenback into positive territory.

Additionally, the hawkish tone in the Federal Open Market Committee (FOMC) minutes released on Tuesday, coupled with Wednesday's optimistic US labor market and consumer sentiment data, is holding back bears from making fresh bets against the USD.

The recent minutes from the Bank of Mexico (Banxico) underscore the importance of keeping rates higher for an extended period to bring inflation to its target. Coupled with the positive inflation data revealed earlier in the week, this is weighing on the USD/MXN pair.

The Banxico minutes revealed that the Government Board unanimously decided to keep rates at 11.25%, marking the fifth consecutive meeting after a two-year rate-hike cycle. Despite acknowledging progress in the disinflation process, policymakers emphasized that the outlook remains "challenging.