USD/MXN: Peso requires continuation of a hawkish stance from Banxico to maintain stability – TDS
|On Thursday, November 11 at 19:00 GMT the Bank of Mexico will have its monetary policy meeting. In the view of economists at TDS, Banxico will hike rates by 25bps to 5%, which should support the peso.
Volatile short-term US yields remain a challenge for the peso
“We expect Banxico to hike rates by 25bps, though inflation trends continue to suggest the risk of a more aggressive rate move.”
“MXN's sensitivity to US yields is adding a challenge to the peso, as US short-term yields remain volatile and face upside pressure.”
“We expect that the market would be substantially helped by a larger than 25bp rate hike, or at the least a unanimous decision on the rate hike.”
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