Mexican peso: surprise Banxico cut leaves peso vulnerable, says ING
FROM THE WIRE · FXSTREET.COM
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…
Read at the source ↗MARKET IMPACTHIGH✦ News Impact agent estimateTone: expected bearishA central bank rate cut that narrows the spread with the Fed can weaken the peso.AI-generated summary
✦ IN BRIEF · AIAI-generated summary
- 01Banxico cut its policy rate to 6.25% in a surprise 3-2 vote.
- 02The Banxico-Fed spread narrowed to 225bp, the lowest in decades.
- 03ING argues the peso remains exposed to external risk, with USD/MXN above 19 more likely than not.