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The peso has recently made a comeback as the ultimate proxy for risk-off moves amid the COVID-19 news and developments in the oil market, Luis Hurtado from CIBC Capital Markets briefs. USD/MXN trades at 23.887.

Key quotes

“We are lowering our year-end forecast for the Mexican Overnight Rate to 5.5% from 5.75%.”

“We expect USD/MXN to fluctuate around the 22 mark, following the highs reached after the surprise rate cut of 100bps by the Fed.”

“We look for the MXN to remain under pressure, with sudden spikes in volatility as an abundance of external developments crowd headlines, while concerns about lower GDP growth prospects and credit rating revision also arise.”

“Q2 20: 21.0| Q4 20: 20.6”