Ella 
USD/MXN continues to fall for the third straight session since Mexican employment data showed a strong labor market and continued strength in the Mexican economy. On Monday in Asia, USD/MXN fell to around 18.0900.
On Thursday, Mexico’s unemployment rate fell to 2.9% in September from 3.0% in August. However, Mexico’s trade balance data released on Friday showed that the trade deficit widened to $1.481 billion from $1.377 billion in August.
Additionally, escalating conflict in the Middle East should boost prices for commodities such as crude oil and gold, which could provide some support for the Mexican peso (MXN). Israel has expanded its ground operations in the Gaza Strip, attacking multiple Hamas strongholds, which could affect emerging market currencies including the Mexican peso.
Jonathan Heath, deputy governor of the Mexican Central Bank (Banxico), recently pointed out that rising government debt in 2024 will pose further challenges in dealing with inflation. Jonathan Heath, deputy governor of the Mexican Central Bank (Banxico), stressed that monetary and fiscal policies are not in sync.
The U.S. dollar index (DXY) appears to remain weak, remaining subdued as falling U.S. Treasury yields weigh on the greenback. However, as of the latest news, the 10-year U.S. bond yield is showing signs of rebounding and stands at 4.87%.
The U.S. core personal consumption expenditures price index data released last Friday showed that the annual rate of the PCE price index fell to 3.7% in September from the previous value of 3.8%. The U.S. core PCE price index rose to 0.3% on a monthly basis from the previous reading of 0.1%.
Market focus is on the upcoming Federal Reserve (FED) meeting on Wednesday, with current market sentiment leaning towards the belief that the Fed will keep interest rates unchanged at 5.5%.
