USD/MXN: On track to return below 17.00 for the first time since early September – SocGen

The Mexican Peso has rallied 5.9% vs. the US Dollar this month. Economists at Société Générale analyze USD/MXN outlook.

17.70 is near term hurdle

The MXN is on track to strengthen to 17.00/USD for the first time since early September amid broad USD weakness.

The pair is expected to drift towards next potential supports at 17.00 and July/August lows near 16.60. 

Confluence of 50-DMA and 200-DMA near 17.70 is near term hurdle.

The Banxico will release its quarterly inflation report on Wednesday. The forecast should be in line with those of November: average inflation steadily slowing to 4.4% in 4Q23 and 3.4% in 2024, with the average core slowing to 5.3% and 3.3%, respectively.