• USD/MXN consolidates around 17.00 ahead of Fed US PMI and Mexico’s inflation data.
• US Manufacturing PMI is expected to contract consecutively.
• The Fed is expected to resume its aggressive rate-hike cycle after a skip in June.

The USD/MXN pair demonstrates topsy-turvy moves near the crucial resistance of 17.00 in the Tokyo session. The asset struggles to gauge a clear direction as investors shift their focus toward the interest rate decision by the Federal Reserve (Fed), which will be announced on Wednesday.

S&P500 futures remains muted, continuing their lackluster performance displayed on Friday. A stock-specific action is witnessed in the US equities as firms have started reporting earnings for the second quarter. The US Dollar Index (DXY) remains choppy in Asia as investors prefer to remain light ahead of Fed’s monetary policy.

It is widely expected that the Fed won’t skip hiking interest rates consecutively and will raise rates by 25 basis points (bps) to 5.25-5.50%. This could be the last nail in the coffin and the Fed will keep elevated interest rates stable this year. According to Goldman Sachs, the Federal Reserve's widely-expected interest rate hike at its upcoming policy meeting next week will be "the last" of the US central bank's long-running tightening cycle.

Before Fed’s policy, investors’ focus will be on preliminary S&P PMI data for July, which will be published today at 13:45 GMT. As per the estimates, Manufacturing PMI is seen improving nominally to 46.4 vs. the former release of 46.3. This could be a consecutive contraction in factory activities as the figure would be below 50.0.

Meanwhile, the Mexican Peso would hog the limelight ahead of semi-annual inflation data, which will release at 12:00 GMT. Earlier, headline inflation delivered a pace of 0.02% while the core Consumer Price Index (CPI) excludes volatile oil and food prices remained at 0.11%.

Later this week, Mexico’s Unemployment data for June will be in focus. The jobless rate is expected to drop to 2.8% against the former release of 2.9%.