Ella 
In Asia on Thursday, USD/MXN continued its upward momentum on Monday, trading around 17.7110. Maintaining risk aversion, higher U.S. bond yields and improving economic data boosted USD/MXN.
The U.S. dollar index extended its gains to its highest level since December, hovering around 106.70 at press time. Strong U.S. economic data boosted the U.S. dollar index. The dollar strengthened as U.S. bond yields rose as the U.S. government shut down.
The 10-year U.S. Treasury yield hit a record high, standing at 4.61% at press time.
A hawkish speech from a Federal Reserve (Fed) board member reinforced the bullish momentum for the dollar. Minneapolis Fed President Neel Kashkari made the latest speech, indicating that further interest rate increases are possible in the future.
In addition, Kashkari also said that the option of keeping interest rates unchanged at current levels remains open, especially if the rate cut may be further delayed. These comments from Fed officials boosted the dollar’s gains.
U.S. durable goods orders rose by 0.2% in August, a significant improvement from the previous reading of -5.6%. The performance beat market expectations, which were expecting -0.5%.
The Energy Information Administration’s crude oil inventory change data for the week ended September 22 showed that crude oil inventories decreased by -2.17 million barrels from the previous value of -2.135 million barrels. Future value -320,000 barrels.
Mexican President Andres Manuel Lopez Obrador praised the Bank of Mexico’s effectiveness as inflation fell. However, the president also stressed that it is important for Mexico’s central bank to focus more on promoting economic development.
If the downward trend in inflation continues, the Bank of Mexico may consider adjusting monetary policy. These potential adjustments could impact MXN/USD volatility.
Market participants are likely to focus on Mexico’s August unemployment rate and Thursday’s interest rate decision from Mexico’s central bank (Banxico). In the United States, the core personal consumption expenditures (PCE) price index, the Fed’s preferred measure of consumer inflation, is expected to fall to 3.9% from 4.2% on Friday.
