the mexican peso it has risen against the dollar in recent weeks. MUFG bank analysts They argue that the resistance of the Mexican peso may not last long amid internal and external risks. His forecast is that the USD/MXN reach 19.80 at the end of the first quarter of 2023 and 20.00 in the third quarter.
Notable Statements:
“The Mexican peso continued its strengthening path in November helped by improving risk sentiment and a weaker US dollar supported by expectations of a slower rate of Fed hikes.”
“The new Fed hikes, albeit slower, together with the resilience of core inflation in Mexico, suggest further hikes in interest rates in Mexico. We expect a further rise of 50 basis points in the December meeting until the 10.50%, followed by a final rate hike to 11.00% early next year Although this scenario could be favorable for the appreciation of the MXN, we see a set of risk factors that could reverse the appreciation of the MXN observed in the last few months.”
“The scenario of some recession in the United States affects the trajectory of Mexican growth.”
“We maintain our bearish forecast profile for the MXN due to growing fears of a sharp global economic slowdown, and internal risks coming from AMLO’s possible radical policies leading to some growing fiscal imbalances. These risks are higher in a circumstance of weaker economic growth in the future, which could affect the popularity of López Obrador, who is currently at quite high levels (61% approval).”
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.
