The data out of Mexico this week, alongside the minutes to the central bank’s August meeting, support our view that Banxico will continue its easing cycle in September. Elsewhere, the further narrowing of Chile's current account deficit last quarter, combined with a shift in financing back to more stable FDI flows, is one of the reasons why we think the Chilean peso will outperform other Latin American currencies over the next year or so. Finally, the debate around whether Brazil's central bank will hike interest rates has rumbled on this week, but we still think that the bar for a resumption of the tightening cycle is high.
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