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  • Banxico acknowledges economic slowdown in August meeting minutes.
  • USD/MXN continues to trade in tight range above 20.

In the minutes of its August meeting, the Central Bank of Mexico noted that some board members thought that the economic deceleration has been bigger than anticipated.  

The USD/MXN pair’s reaction to the statement stayed relatively muted. As of writing, the pair was down 0.1% on the day at 20.0766.  Below are some key takeaways as reported by Reuters.

“Board member Guzman voted to hold rate at 8.25%.”

“Majority of board members saw the risk that peso exchange is pressured by internal and external factors.”

“Majority of board members said that the central scenario for inflation could improve somewhat largely thanks to less pressure from non-core inflation.”

“All board members said the balance of risks for growth continues to be tilted downwards in environment of marked uncertainty.”

“Majority of board members mentioned the threat of US  tariffs and the adoption of compensatory measures as an upside risk to inflation, though this risk was seen to have diminished.”

“Majority flagged the risk that wage revisions could outstrip productivity gains, putting pressure on costs.”