After the Banxico meeting on Thursday, Rabobank analysts they still hope that the pair USD/MXN It mainly trades within a range of 19.50 to 21.0 with a bias towards the 19.80 to 20.60 region. The central bank kept rates unchanged as expected at 4%. Analysts argue that the general tone of the statement can be described as neutral, but there is certainly a more aggressive stance in relation to the March statement.
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“We maintain the opinion that Banxico will remain on hold at 4.00% for the rest of this year.”
“Banxico was notably more aggressive, while minimizing the possibility of imminent rate hikes. It’s a tough tightrope to walk, but the statement was something of a masterclass on how it can be done. Banxico is in wait and see mode, along with many other central banks around the world, as they try to discern whether the current rise in inflationary pressures is likely to be transitory or more persistent. “
“USD / MXN momentum was firmly skewed to the downside heading into the decision, with the pair falling around 1.5% from a high of 20.21 to 19.91 at the time of writing. We continue to consider that Banxico will leave rates at 4.00% this year. We expect the USD / MXN to trade primarily within a 19.50-21.0 range with a bias towards the 19.80-2060 region. “
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