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MEXICO: Rabobank Do Not Expect Faster Banxico Easing, Forecast USDMXN at 21.00

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • Rabobank are forecasting eight 25bp cuts from Banxico in 2025. Despite most recent guidance on potential larger cuts, Rabo do not expect the committee to start cutting in 50bp clips going forward.
  • They believe Banxico will be hesitant to stretch the US-MX rate differential and fuel further MXN weakness, which could be dangerous as the global trade scheme rearranges itself with administrations threatening and implementing tariffs.
  • Rabo expect to see MXN weakness drive USD/MXN up to the 21-handle on a one-month view, and 21.20 in three months. Their forecast is for the pair to trade sideways in 2025 and end the year at 21.00.
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  • Rabobank are forecasting eight 25bp cuts from Banxico in 2025. Despite most recent guidance on potential larger cuts, Rabo do not expect the committee to start cutting in 50bp clips going forward.
  • They believe Banxico will be hesitant to stretch the US-MX rate differential and fuel further MXN weakness, which could be dangerous as the global trade scheme rearranges itself with administrations threatening and implementing tariffs.
  • Rabo expect to see MXN weakness drive USD/MXN up to the 21-handle on a one-month view, and 21.20 in three months. Their forecast is for the pair to trade sideways in 2025 and end the year at 21.00.