• USD/MXN extends gains on risk aversion following the hawkish tone from Fed officials.
• Fed Chair Powell could provide commentary on monetary policy at a panel discussion.
• US Dollar experiences challenges due to the downbeat US bond yields.

USD/MXN extends its gains for the second successive session, trading near 17.5600 during the European session on Thursday. The USD/MXN pair receives upward support possibly due to the risk aversion following hawkish remarks from the US Federal Reserve (Fed) officials regarding interest rate cuts.

Fed Governor Michelle Bowman hints at the central bank considering future increases in short-term interest rates, adding an element of uncertainty. Additionally, Neil Kashkari, President of the Minnesota Fed, cautioned whether the central bank has raised rates enough.

Investors got no indication during the US Central Bank statistics conference on Wednesday as Fed Chair Jerome Powell opted not to provide commentary on monetary policy. However, Powell is expected to join a panel discussion later today focusing on "Monetary Challenges in a Global Economy."

Federal Reserve acknowledges the easing of financial conditions. This acknowledgment reduces the urgency for future rate hikes. However, it introduces the potential for increased risk of unexpected hawkish policy shifts.

The Bank of Mexico (Banxico) is expected to maintain rates at 11.25% in the upcoming meeting. Banxico officials reiterate commitment to keeping rates at the "current level" in the ongoing battle against inflation. Investors await Mexico’s Headline Inflation for October, which is expected to ease at 0.39%.