Ella 
USD/MXN extended losses for the second consecutive day, falling to around 17.18 during early European trading on Thursday. The Mexican peso (MXN) was volatile after U.S. households raised their inflation expectations. The development sent U.S. Treasury yields surging, potentially providing support for the U.S. dollar (USD).
The University of Michigan Consumer Sentiment Survey showed inflation expectations in one year rising to 4.5% from 4.4% in the last report, while inflation expectations in five years were at 3.2%. Additionally, U.S. durable goods orders fell 5.4% in October, compared with the consensus of 3.1%. U.S. initial jobless claims fell to 209,000 in the week ended Nov. 17, a larger-than-expected decline from 233,000 previously.
Mexico, on the other hand, saw retail sales rise 2.3% year-on-year in September. That was a slowdown from August’s 3.2% growth and below expectations of 3.6%. The numbers are starting to reflect the impact of Mexico’s central bank (Banxico) raising interest rates, which currently stand at 11.25%.
Separately, preliminary forecasts reported by Reuters showed that Mexico’s economy grew 2.9% year-on-year in October. Looking ahead, forecasts on Thursday pointed to an increase in inflation in the first half of November, but core inflation is expected to fall slightly. Additionally, annual gross domestic product will be released on Friday, with a contraction expected in the third quarter.
U.S. markets will be closed Thursday for Thanksgiving. On Friday, the U.S. will release the S&P Global Manufacturing and Services Purchasing Managers Index (PMI) for November, with both indexes expected to fall.
