USD/MXN dips as US inflation aligns with expectations

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The US Bureau of Economic Analysis (BEA) reported that February's Core PCE increased by 0.3% month-over-month, coming in lower than the prior month's figures. On an annual basis, the core PCE cooled slightly from 2.9% to 2.8%, aligning with consensus estimates. The headline inflation rate for February also stood at 0.3%, below January's projections, while the year-over-year figure edged up to 2.5% from 2.4%.

Despite somewhat easing inflation, Federal Reserve policymakers remain vigilant. Other inflation metrics, such as the Consumer Price Index (CPI) and the Producer Price Index (PPI), indicate that price pressures could be anchoring above 3%.

Aside from this, traders took some cues from Fed Governor Christopher Waller. He was hawkish, emphasizing that the Fed is not in a hurry to reduce interest rates. The US economic docket will feature San Francisco Fed President Mary Daly and Fed Chair Jerome Powell at 15:20 and 15:30 GMT.

On the Mexican front, the docket will feature the Mexican Ministry of Finance's release of the fiscal balance. Traders are eyeing next week’s S&P Global Manufacturing PMI for March.


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