USD/MXN remains sidelined near 17.06 amid early Thursday in Asia, struggling to extend the previous day’s losses amid the market’s indecision ahead of the US inflation figures.
That said, the Mexican Peso (MXN) pair dropped 0.15% on Wednesday even as Mexico’s inflation data for July came in softer than expected but were mixed when compared to the previous readings.
Also read: USD/MXN drops as inflation cools down in Mexico, traders eye Banxico’s monetary policy decision
It should be noted, however, that the options market appears the most bullish in a month and might have exerted downside pressure on the USD/MXN price of late.
While portraying the options market bias, the one-month Risk Reversal (RR) of the USD/MXN pair, a measure of the spread between call and put prices, dropped the most in a month to -0.065 by the end of Wednesday’s North American trading session.
However, the weekly RR still remains positive for the fourth consecutive time, to 0.325 by the press time, which in turn prods the USD/MXN bears of late.
Elsewhere, the US Dollar Index (DXY) lacks clear directions near 102.50 after snapping a two-day losing streak as markets await the US inflation data, per the Consumer Price Index (CPI) for July. Analysts’ expectations suggest an improvement in the headline CPI to 3.3% YoY versus 3.0% prior while the Core CPI, namely the CPI ex Food & Energy, may remain unchanged at 4.8%.
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