美元/墨西哥比索

The Mexican Peso (MXN) recovered some ground against the US Dollar (USD) on Wednesday after losing 0.45% in the previous week, following a US inflation report that was higher than expected, which increased the odds of further Federal Reserve (Fed) tightening.

TD Securities views the Mexican Peso (MXN) favourably, noting supportive carry and value metrics and cleaner positioning.

The Bank of Mexico (Banxico) Governor Victoria Rodriguez Ceja said in an interview with El Financiero that the Mexican central bank has been considering rate cuts since September.

Chris Turner at ING highlights Banxico’s surprise 3-2 vote to cut its policy rate to 6.25%, narrowing the Banxico-Fed spread to 225bp, the lowest in decades. He notes Banxico’s focus on weak Mexican growth and a negative output gap, with limited concern about Peso-driven inflation. Turner argues this stance leaves the Peso exposed to external risk, making a move in USD/MXN above 19 more likely than not.

The Mexican Peso depreciates against the US Dollar after the Bank of Mexico (Banxico) unexpectedly cut interest rates in what it called a “one-time adjustment.” The USD/MXN trades at 19.74, yet it touched a daily low of 18.96.

On Thursday, the Bank of Mexico – known as Banxico for its Spanish acronym – cut rates by 25 basis points to 6.25%, in an unexpected move that caught market participants off guard, who had expected rates to remain unchanged at 6.50%.