- USD/MXN continues winning streak as negative sentiment over the war between Israel and Hamas worsens.
- The deputy governor of Banxico, Omar Mejía, has stated that the balance of inflation risks has not worsened.
- US building permits exceeded expectations and home construction starts rebounded in September.
USD/MXN extends winning streak for the third consecutive session, trading higher around 18.2990 at the start of the European session on Thursday. The pair gains ground due to risk aversion amid the escalating military situation between Israel and Hamas.
The visit of the President of the United States, Joe Biden, to Israel has so far failed to calm the conflict. The recent explosion at a Gaza hospital, blamed on Israel, has increased tensions, with Iran considering imposing an oil embargo on Israel and stepping up its rhetoric against the country.
The deputy governor of the Bank of Mexico (Banxico), Omar Mejía, has stated that the balance of inflation risks has not worsened and has highlighted that the current restrictive monetary policy is successfully managing inflation. Mejía expects that he will align with Banxico’s objective for the second quarter of 2025.
The DXY Dollar Index recovers, influenced by both US economic data and the escalation of the conflict between Israel and Hamas. The DXY index is hovering around the 106.60 level at the time of writing. However, dovish comments from several Federal Reserve officials suggest a cautious stance, reluctant to tighten monetary policy in the current economic scenario.
The US housing market is sending mixed signals: September building permits exceeded expectations and housing starts rebounded, although slightly below market consensus, adding complexity to the picture.
September building permits stood at 1.47 million, above the 1.45 million expected. On the other hand, housing starts rebounded to 1.35 million, just below the market consensus of 1.38 million.
Data on existing home sales, the Philadelphia Fed manufacturing index and weekly jobless claims will be released on Thursday. Additionally, traders will closely monitor Mexico’s retail sales for August, which will be released on Friday, for possible short-term opportunities around the USD/MXN pair.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
