• Mexican Peso depreciates as broader market caution remains before Fed decision.
• US employment data and a low Employment Cost Index shows the labor market is cooling.
• USD/MXN traders eye FOMC, which is expected to adopt a neutral interest rate stance.

The Mexican Peso (MXN) weakens against the US Dollar (USD) on Wednesday and posts losses of more than 0.10% as risk aversion drives the financial markets ahead of the US Federal Reserve’s (Fed) monetary policy decision. Mexico’s economic docket is empty. In the United States, employment data was soft, and the Employment Cost Index (ECI) sought by Fed officials as a measure of inflation in wages dipped below estimates. The USD/MXN trades at 17.16 after hitting a daily low of 17.09.

Wall Street trades with losses as investors prepare for the Fed. The US central bank is expected to keep rates at the 5.25%-5.50% range with the tone of the statement remaining neutral. Following that, Fed Chairman Jerome Powell's press conference is expected to strike a more balanced approach, recalling last December’s ultra-dovish conference