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Dampened Risk Sentiment Knocks Peso

MEXICO
  • Developments overnight have weighed on the Mexican peso on Tuesday and USDMXN is seen roughly half a percent higher ahead of the US session.
  • A quiet domestic docket this week keeps broader global factors and the impending US employment report on Friday as the key driver for local assets.
  • Focus will then turn to next week’s inflation data and the subsequent Banxico decision, due on August 11.
  • During yesterday’s session, Mexico economists raised their 2022 CPI estimate to 7.83% from a prior forecast of 7.45% in the latest Banxico survey. 2023 year-end inflation was also raised to 4.58% from 4.50%.
    • 2022 GDP raised to 1.78% from 1.77% and 2023 GDP was cut to 1.51% from 1.74%.
    • 2022 yr-end exchange rate raised to 20.80 from 20.73 MXN/USD and 2023 yr-end exchange rate lowered to 21.27 from 21.30.

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