The Brazilian real and the Mexican peso benefited from the signal of a pause in US interest rates. The economists of commerzbank they expect both currencies to remain strong against the US dollar.
BRL and MXN remain attractive
“Both central banks have been so aggressive lately that I think the Fed rate pause was a necessary condition for the BCB and Banxico to consider moving away from their ultra-aggressive stance. Given the high real interest rates in Brazil and Mexico , it seems justified to slightly lower the monetary policy rates.”
“However, with inflation still high, both central banks are likely to be wary of keeping monetary policy tight enough to avoid the risk of additional inflationary pressures from a weaker currency. Consequently, we see the BRL and MXN remain at strong levels against the dollar.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
