USD/MXN: Downtrend unlikely to last as Banxico nears end of tightening cycle – CIBC USDMXN Mexico InterestRate Banks
“Although we agree with Banxico’s governor Jonathan Heath view on the need for at least another 25 bps rate increase given above target core and headline inflation, we see Banxico moving to a data dependent stance next month as CPI comes in slightly below the most recent central bank forecast, likely ending it tightening cycle at 10.75%.”
“Note that the market continues to price aggressive rate cuts during the second half of 2023, bringing the overnight rate closer to 9.25%-9.50% by the end of the year. Hence, though recently breaking lower and pointing to its prepandemic level , we would not chase the current USD/MXN downward trend from current levels.”Information on these pages contains forward-looking statements that involve risks and uncertainties.
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