USD/MXN loses ground for the second consecutive session, inching lower to near 17.05 during European trading hours on Friday. The mixed labor data from the United States (US) has weakened the US Dollar (USD), acting as a headwind for the USD/MXN pair.
Initial Jobless Claims for the week ending on January 26 rose to 224K, higher than the previous rise of 215K and the expected figure of 212K. The preliminary US Nonfarm Productivity appreciated by 3.2% in Q4, surpassing the expected 2.5%, but down from the previous reading of 4.9%. Furthermore, US Average Hourly Earnings and Nonfarm Payrolls (NFP), are scheduled for release on Friday.
Additionally, the subdued US Treasury yields are adding pressure on the US Dollar (USD). The downward pressure on US Treasury yields followed reports from regional bank New York Community Bancorp, revealing increased stress in its commercial real estate portfolio.
On the other side, markets are factoring in a 25 basis points (bps) interest rate cut by the Bank of Mexico (Banxico) starting in March. A survey of expectations estimates that the bank will lower rates to 9.25% by the end of 2024. Markets expect it to reach 4.17%, and economic growth is anticipated to range from 2.29% to 2.40%. However, Banxico is expected to make no interest rate adjustment in the upcoming February policy meeting.
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