The Mexican peso was on a rollercoaster ride this week but, as we'd expected, Banxico placed more emphasis on the weakness in the economy as it pressed ahead with a 25bp cut (to 10.75%). And the accompanying statement left the door open to further cuts, which supports our view that the policy rate will be lowered to 10.00% this year. Elsewhere in the region, the key channel through which the resurfacing of US recession fears has had an impact is via commodity prices, especially the fall in industrial metals. We think that this has further to run, but that's mainly due to the structural slowdown in China's property sector, rather than weakness in the US economy.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services