美元/墨西哥比索

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%.

Norman Liebke at Commerzbank expects Banxico to keep rates unchanged after roughly 300 bps of cuts last year and two more this year, as inflation remains slightly above the 3% target and prior easing has yet to fully filter through.