For him Mexican peso (MXN)the slowdown in remittances and vehicle exports predict a decline in the next quarter, say economists from CIBC Capital Markets.
Change of trend
We expect some of the factors benefiting the MXN (i.e. transportation, remittance growth, and manufacturing exports) in 2023 to provide a headwind for the MXN going forward, in line with our forecast of placing the USD/MXN at 18.00 in the first quarter.
We maintain our forecast for consecutive 25 basis point rate cuts starting in March. Besides, We forecast an increase in the magnitude of Banxico's rate cuts at the end of 2024, taking the overnight rate to 9.25% (or 200 basis points of cuts) at the end of the year. This contrasts with our revised forecast of four 25bp rate cuts by the Fed.
Source: Fx Street
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