The Mexican Peso saw a significant rise against the US Dollar on Tuesday following President Claudia Sheinbaum's inauguration and her inaugural speech in Congress. The Peso gained strength as Sheinbaum assured investors that their investments were secure. At the time of writing, the USD/MXN fell by about 0.37%, trading at 19.60, amidst increased tensions in the Middle East.
Wall Street is reflecting a negative market sentiment due to the rising geopolitical risks, which has driven investors towards the US Dollar as a safe haven, negatively impacting the Peso's position as an emerging market currency.
There were no notable economic updates from Mexico, as traders awaited comments from President Sheinbaum following her assumption of office. In contrast, the US economic calendar included the August JOLTS report, which surpassed expectations and showed improvement over July.
The Institute for Supply Management (ISM) reported that the September Manufacturing PMI remained in contraction but was unchanged from August levels.
On Monday, Federal Reserve Chair Jerome Powell indicated that the central bank is not in a hurry to reduce borrowing costs, projecting a potential easing of 50 basis points by the end of 2024.
Given this context, the USD/MXN is likely to maintain an upward trend following Powell's indication that the Fed is not inclined towards aggressive easing.
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