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USDMXN Towards Best Levels Of The Week, Focus On Banxico

MEXICO
  • USDMXN continues to test the upper end of the range as US dollar strength extends into Thursday. Better than expected retail sales released this morning as well as a marginally positive monthly reading for January Economic Activity at 0.11% vs 0.00% estimate.
  • Focus will turn to Banxico, where analysts remain split on whether the bank may provide any further additional stimulus in the form of a 25-bps rate cut or whether they will hold rates at 4.00%. Most recent inflation data has potentially set the bar higher to cut rates, exemplified by Barclays and Capital Economics adjusting their calls from cut to hold, following the data.
  • Our preview, policy report and analyst views as of writing can be found here:
  • https://roar-assets-auto.rbl.ms/documents/9280/MNI%20Banxico%20Preview%20March%202021.pdf

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