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Banxico’s Heath Counters AMLO On Growth Comments

MEXICO
  • Mexico central bank Deputy Governor Jonathan Heath said the best contribution monetary policy can make to economic growth is to generate price stability. The comments, via twitter, came just hours after President AMLO suggested the bank should prioritize growth as well as inflation.
  • In a series of tweets released on Friday, Heath said low inflation contributes to growth in the medium and long term and the only way to lower interest rates is to deal with high inflation first.
  • The central bank’s hawkish surprise to raise interest rates by 50bp on Thursday, as well as signalling further hikes to come, are underpinning the Mexican peso.
  • On the downside for USDMXN, key support and the bear trigger is at 18.5080. A break resumes the technical downtrend.
  • There are no major economic data releases this week in Mexico.

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