MEXICO: MXNJPY Sinks 2.2%, Approaches Monday Lows
Feb-05 15:37
- The Mexican peso continues to underperform peers today, ahead of Thursday’s Banxico meeting, with USDMXN up by 0.8% on the session around the 20.70 level. The central bank is widely expected to deliver a larger 50bp interest rate cut tomorrow, despite uncertainty surrounding a potential trade war, which is likely to keep the short-term MXN trajectory volatile.
- CIBC says that the one-month delay in tariffs against Mexico has significantly increased the odds of a 50bp rate cut this week. They note that Banxico appears less concerned with the inflation path with core CPI already within Banxico’s target range and, most importantly, core services CPI sustaining a downward trend.
- Earlier, state utility CFE said that it will partner with Pemex to build 3 cogeneration projects at Pemex refineries for $2.1bn. President Sheinbaum said that new CFE projects would add 22.7GW to the grid by 2030.
- Amid the continued outperformance of JPY today, meanwhile, MXNJPY has fallen by over 2%, bringing the pair back towards 7.35 and narrowing the gap to Monday’s 2-month lows around 7.30.
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