USDMXN to trade back above 20 before month-end – Rabobank
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Economists at Rabobank expect Banxico to raise rates 75 basis points to 10.00%. In any case, USDMXN is set to trade above the 20 level again.
“We expect another 75 bps hike from Banxico on November 10, but after that meeting, we expect a 50 bps hike on December 15 and a final 25 bps hike on February 9, taking the policy rate up to a terminal rate of 10.75%.”
“In terms of USDMXN, we did recently see a dip below support at 19.50 but that didn’t last long and our indicators are pointing to a likely reversal, with a move back above 19.80 and a likely break back above 20 yet again.”
“If our 75 bps hike call is incorrect and Banxico raises rates 50 bps, then a break above 20 is likely to happen in the aftermath of the decision, but even if a 75 bps hike is forthcoming, we expect USDMXN to trade back above 20 before month-end but for MXN to outperform the rest of the LatAm region.”
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