Update from North America

U.S. Dollar recovers, MXN survives Banxico rate cut

2 min read

The U.S. Dollar is trading in favorable ranges across the board, with the Mexican Peso being the exception, as a rout in stock exchanges worldwide marked a moment of risk aversion ahead of the release of Non-Farm Payrolls.

After an eventful week that included the U.S. midterm elections as well as evidence of slower activity in Purchasing Managers Index figures, the Buck overall moved within a half-percent range, returning to levels last seen at the end of last month. Although equities took a hit because of growing doubts that big spending will remain a feature of artificial intelligence advancement, futures are up this morning as dip buyers took advantage.

In terms of labor, the October Non-Farm Payrolls are expected to show an increase of 70K jobs, while the Unemployment Rate is expected to stay at 4.2%. The main concern, especially following exit polls after voting on Tuesday, is Average Hourly Earnings, which are expected to climb by 0.3%. Later, at 10 AM, we will get the University of Michigan Consumer Sentiment reading for the start of November. Next week, the focus of most measures will be on inflationary pressures.

What to Watch This Week…

The complete Economic Calendar can be found here.

MXN

The Mexican Peso is the only currency showing any resilience to the U.S. Dollar’s recovery rally following an interesting central bank meeting policy announcement. Banxico’s officials surprised markets by voting to reduce the benchmark interest rate from 6.5% to 6.25%. Nevertheless, the event turned into a “hawkish” cut, with board members split yet signaling that they plan on keeping this level for a while. They cited uncertainty in their economic forecasts due to changes in U.S. economic policies and predicted a period of disinflation ahead. Thus far, the narrative is keeping the Peso steady and tilted positive.