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Today’s Mexican inflation data for April is unlikely to have a negative impact on the Peso, economists at Commerzbank report.
MXN depreciation risks likely limited
“We see little downside risk for the MXN after today’s data, as any negative surprise on inflation should be offset by Banxico’s credibly hawkish stance. At the same time, inflation risks remain so high that even if inflation turns out to be weaker than expected, hardly any analyst or market participant is likely to assume that Banxico would diverge from the Fed and consider easing monetary policy much sooner.”
“We continue to expect the MXN to hold up well against the USD for the time being, even if the start of monetary easing in the US and Mexico is envisaged towards the end of the year.”
