Anna 
The USD/MXN pair has rebounded, advancing to around 17.08 during European trading hours on Wednesday after experiencing losses in the prior two sessions. The strength of the US Dollar (USD) is the driving force behind the movement, influenced by a prevailing risk-off sentiment in the market. This comes ahead of the release of the preliminary Gross Domestic Product Annualized (Q4) data from the United States scheduled for later in the day.
Despite subdued US Treasury yields, the US Dollar Index (DXY) continues to strengthen, reaching nearly 104.10. The 2-year and 10-year yields on US Treasury bonds stand at 4.69% and 4.29%, respectively, at the time of reporting.
In economic news, the US Housing Price Index (MoM) saw a modest increase of 0.1% in December, falling short of expectations for a 0.3% increase. Additionally, US Durable Goods Orders experienced a significant decline of 6.1%, contrasting sharply with expectations for a decrease of 4.5%.
On the Mexican side, the Bank of Mexico (Banxico) has set higher interest rates at 11.25%, potentially impacting economic activities. The upcoming release of Jobless Rate data by INEGI is anticipated on Thursday, with an expected slight increase to 2.8% in January.
Tuesday’s report on Mexico’s Trade Balance for January revealed a trade deficit of $4.315 billion, surpassing expectations and exceeding the previous deficit. The seasonally adjusted figures reported a deficit of $0.302 billion compared to the previous surplus.
These subdued trade figures may have contributed to undermining the Mexican Peso (MXN), providing support for the USD/MXN pair. The market awaits further economic data and central bank actions for potential impact on the currency pair in the coming sessions.
