USD/MXN to hover around 19.80-20.20 in the coming months – Rabobank

Economists at Rabobank expect Banxico to raise rates 25bp to 4.50% on Thursday, August 12. Regarding the Mexican peso, USD/MXN is likely to remain in the 19.80-20.20 range in the coming months.  

Another 25bp rise

“We expect Banxico to raise rates 25bp to 4.50%. This is in line with all 21 analysts surveyed by Bloomberg and implied pricing from the MXN curve. As with the 25bp increase at the previous meeting, we expect a split vote.”

“We maintain the view that the USD/MXN pair will primarily trade a 19.80-20.20 range in the coming months and favour playing that range.”

“We are becoming more bullish USD vs EM but within the EM space. We expect MXN to remain well supported compared to the bulk of its peers within the LatAm region.”