Ella 
USD/MXN’s rebound momentum weakened and fell to 17.20 in Asia on Friday. The U.S. dollar was broadly boosted by hawkish comments from the Federal Reserve. Investors instead focused on the U.S. September S&P Global/CIPS Purchasing Managers Index (PMI) released during the North American session on Friday.
At Wednesday’s meeting, the Federal Reserve decided to keep interest rates unchanged at 5.25-5.50%, in line with broad market expectations. In addition, Federal Reserve Chairman Powell confirmed at a press conference that the central bank is committed to achieving the 2% inflation target and mentioned that the Fed is prepared to raise interest rates if necessary. This boosts the greenback and is bullish for USD/Peso.
According to the Federal Reserve’s latest quarterly forecast, the benchmark overnight interest rate may increase again this year to a peak range of 5.50%-5.75%, and interest rates may tighten significantly in 2024 than previously estimated.
On Thursday, the number of people filing for unemployment benefits in the United States fell to 201,000, the lowest level since January. At the same time, the Philadelphia Fed manufacturing index fell to -13.5 in September, from the previous value of 12.0, and -0.7 expected. Existing home sales in August fell to 4.04 million from the previous month, from 4.07 million.
In the Mexican peso, Mexico’s National Institute of Statistics, Geography and Information (INEGI) reported on Thursday that Mexican retail sales fell to a monthly rate of 0.2% in July, below market expectations of 2.3%. The data increased 5.1% year-on-year, compared with the previous value of 5.9%, and above the market consensus of 4.9%.
Ahead of U.S. PMI data, market participants will take cues from Mexico’s economic activity data for July. These data will provide clear direction for the USD/Mexico pair.
