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USD/MXN: Mexican Peso weakness is no longer going given the unusual raise ambiance – Rabobank

Banxico introduced its latest price resolution on Thursday, March 21, when it determined to minimize charges for the first time since 2021. USD/MXN barely moved on the resolution. Economists at Rabobank analyze the pair’s outlook.

Make stronger at 16.60 to personal

Banxico minimize the in a single day policy price 25 bps to 11.00% on Thursday, March 21. The resolution printed a 4 to 1 cleave up with Irene Espinosa dissenting in desire of a no-trade resolution. The accompanying inflation forecasts were largely unchanged moreover for a 0.1ppt upward revision to the 2024 headline CPI forecast which used to be raised from 3.5% to three.6%. Inflation up, charges down.

Our forecast for the tip of twelve months policy price is unchanged at 9.50% as we’re now assuming 25 bps cuts at every assembly; beforehand, we had anticipated a glean to 50 bps clips in Q4.

USD/MXN hardly moved in response to the resolution given it used to be largely priced in. We continue to observe 16.60 as key support on the downside, while marked MXN weakness is no longer going given the unusual raise ambiance.

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