Daily digest market movers Mexican Peso advances sponsored by offered US Dollar

Banxico’s Governing Council voted unanimously to lower borrowing costs from 10.50% to 10.25%, as expected. Governors added that although inflation remains high and requires a restrictive policy, the disinflation process “implies that it's adequate to reduce the level of monetary policy restriction.”

Officials expect inflation to converge to the 3% goal by the last quarter of 2025.

The USD/MXN remains underpinned by the fall of the Greenback. The US Dollar Index (DXY), which tracks the performance of the Greenback against six currencies, dropped 0.38% to 106.26.

Fed officials crossed the wires on Friday. Boston Fed’s Susan Collins reiterated Fed Chair Jerome Powell’s words last Thursday about the central bank not needing to rush rate cuts. Collins said, “I don’t see a big urgency to lower rates, but I want to preserve a healthy economy.”

Richmond’s Fed Thomas Barkin said the Personal Consumption Expenditures (PCE) Price Index would remain in the high twos during the year's second half. He hopes and expects inflation numbers to come down in Q1 2025 and added there’s a long way to go to determine the impact of high tariffs.

Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 23 bps of Fed easing by the end of 2024.