Ella 
USD/MXN strengthened on Tuesday’s upbeat U.S. economic data.
The Federal Reserve is expected to raise interest rates before the end of the year; the dollar strengthens.
Traders will focus on the Bank of Mexico’s interest rate decision on Friday.
In Asia on Wednesday, USD/MXN tried to extend its three-day rise, rising to around 17.5580. USD/MXN found upward support as the market maintained risk aversion and U.S. bond yields rose.
In addition, stronger U.S. economic data also supported a stronger dollar.
The U.S. consumer confidence index released on Tuesday recorded 103.0 in September, down from the previous reading of 108.7. Building permits rose to 1.541 million in August from 1.443 million previously.
In addition, the monthly rate of house price index climbed to 0.8% in July from the previous value of 0.4%, which was 0.5% lower than the expected value.
Additionally, the Federal Reserve (Fed) is expected to raise policy rates before the end of the year as the U.S. economy shows resilience. This, in turn, boosts U.S. Treasury yields, adding to the dollar’s strength.
At press time, the U.S. dollar index (DXY) was hovering near 106.30, its highest level since December. The 10-year U.S. Treasury yield is hovering near its highest level since October 2007, with the indicator sitting around 4.51% at press time.
Additionally, traders are awaiting a report on U.S. durable goods orders due on Wednesday. The core personal consumption expenditures (PCE) price index, the Fed’s preferred measure of consumer inflation, will be released on Friday. The core PCE price index is expected to fall to an annual rate of 3.9% from 4.2%.
On Tuesday, Minnesota Fed President Neel Kashkari said it was necessary to raise interest rates again and then to keep them at that level. He also mentioned the possibility of a soft landing for the U.S. economy, meaning a gradual slowdown without causing a recession.
Recently, several officials from the Federal Reserve have expressed different views on monetary policy. Some Fed officials advocated patience, while others, such as Fed Governor Bowman, stressed the need to raise rates again.
