|

MXN: Policy easing signals and resilient currency – Societe Generale

Societe Generale analysts note that Deputy Governor Galia Borja signaled Banxico has room to resume rate cuts, pointing to weak domestic demand, falling investment and a stronger Peso. The Mexican Peso stayed resilient despite renewed USMCA concerns and a decline in President Sheinbaum’s approval rating. Revised 4Q GDP and slightly higher mid‑February inflation were also noted.

Banxico signals space for rate cuts

"FX was not immune and spillover from Tech halted the upward run in carry and commodity currencies incl the ZAR, COP, CLP, MXN and AUD."

"The MXN was resilient despite renewed USMCA concerns expressed by USTR Greer and a dip in President Sheinbaum’s approval rating to 56%, the lowest since taking office."

"In Mexico, Deputy Governor Galia Borja indicated that Banxico has room to resume rate cuts, citing weak domestic demand, falling investment and a stronger peso."

"On data front, final 4Q GDP was revised up to 0.9% qoq from 0.8% (1.8% yoy vs 1.6%) and inflation for the first half of February inched up marginally to 3.92% from 3.82%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD extends the range play above 0.7200 as traders await US inflation data

AUD/USD is seen extending its consolidative price move above 0.7200 during the Asian session on Thursday amid mixed cues. Rising RBA rate-hike bets keep the Aussie close to its highest level since May 14. However, hawkish Fed expectations and escalating US-Iran tensions offer some support to the US Dollar, capping the currency pair as traders await US inflation figures.


USD/JPY consolidates around 153.50 as bears turn cautious ahead of US inflation

USD/JPY stabilizes above 153.50 during the Asian session on Thursday, but remains near a seven-month low set earlier this week as hawkish BoJ repricing continues to underpin the Japanese Yen. Meanwhile, rising September Fed rate-hike bets and escalating US-Iran tensions help ease US Dollar selling pressure, offering some support to the currency pair ahead of US inflation figures.

Gold remains weak, retargets $4,350

Gold keeps the choppy price action on Thursday, now slipping back toward the $4,350 region per troy ounce amid the robust bounce in the US Dollar as well as rising US Treasury yields across the curve, particularly following US Producer Prices and ahead of Friday’s more relevant US CPI data.

XRP slides amid a fragile crypto market structure
Ripple (XRP) falls for the second straight day, trading at $1.37 on Thursday. The broader cryptocurrency market remains fragile as investors weigh the impact of geopolitical tensions in the Middle East, which triggered persistent increases in Crude Oil prices while restricting shipping through the Straight of Hormuz and the Red Sea.
Jobs opened the door for the Fed — inflation decides whether it walks through
The latest US jobs report did not end the debate over the Federal Reserve’s (Fed) next move. It may have done something more subtle: it gave policymakers permission to keep their options open. After months of softer labour market signals, August delivered a stronger-than-expected rebound.
Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight
The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.