USD/MXN hovers near 18.3000 below six-month high, awaits US NFP

• USD/MXN experienced upward support ahead of US employment data.
• Mexican government altered airport tariffs, which might exert pressure on the MXN.
• Investors await NFP and earnings data for confirmation post positive data on Thursday.

USD/MXN extends its gains on the second day, trading higher around 19.3000 during the Asian session on Friday. The Mexican Peso (MXN) faced a downward push following the announcement from the Mexican government aviation agency about alterations in airport tariffs.

This development triggered volatility in the Mexican Stock Exchange and intensified the Mexican Peso's decline to a fresh six-month low. However, Mexico’s Consumer Confidence improved 46.4 for September from the previous 46.1 readings.

The US Dollar Index (DXY) struggles to retrace recent losses, trading slightly higher around 106.40 at the time of writing. The DXY corrected from an 11-month high due to a decline in the US Treasury yields.

However, the US Initial Jobless Claims for unemployment benefits in the United States (US) for the week ending September 29, increased to 207K from the previous reading of 205K, beating the market expectation of 210K.

US Challenger Job Cuts have come down significantly from the previous figure of 75.151K to 47.457K in September. Traders await the upcoming US Nonfarm Payrolls and Average Hourly Earnings on Friday, seeking confirmation of a tight labor market. Upbeat numbers could trigger the US Dollar (USD) and increase volatility in the bond market.

Additionally, the US Treasury yields hold steady to remain positioned near multi-year highs, as the market exercises caution regarding the hawkish stance of the US Federal Reserve (Fed) on interest rates trajectory. The 10-year US Treasury yield holds above 4.70%, close to the highest level since 2007.