Mexican Peso consolidates ahead of GDP, inflation data

The Mexican Peso consolidates ahead of the publication of key economic data for Mexico. 

The MXN faces headwinds from slowing growth, central bank dovishness and US politics. 

Technically, USD/MXN is unfolding an up leg within a range that is part of a larger Measured Move pattern.

The Mexican Peso (MXN) trades mild and mixed in its most-traded pairs as the week draws to a close, with idiosyncratic factors impacting each one – the US Dollar (USD), Euro (EUR) and Pound Sterling (GBP) – differently. This may change later on Friday, when Mexico releases Gross Domestic Product (GDP) data for Q3 and mid-month inflation readings for November.

The Peso faces headwinds overall. These include recent weak Retail Sales data – albeit for September sales increased 0.1% on month – and comments from Governor of the Bank of Mexico (Banxico) Victoria Rodríguez Ceja, who said she expects more cuts to interest rates (thereby reducing foreign capital inflows).  In addition, policies from US President-elect Donald Trump also weigh, particularly the threat of tariffs and the possibility of a mass repatriation of Mexican immigrants whose remittances pump regular demand for MXN.