Central Banks

There was some confusion about this

The Banco de Mexico cut rates to 4.25% from 4.50%. This was a generally expected move but it wasn’t unanimously expected by economists with 4 of 23 in the Bloomberg survey calling for no change.

The vote was unanimous at the central bank.

Since the last monetary policy decision, the Mexican peso appreciated slightly, although it has recently been subject to episodes of high volatility, while short-term interest rates decreased and long-term ones exhibited minor adjustments. After having contracted markedly in April and May, economic activity in Mexico began to recover in June and July, although an environment of uncertainty and downward risks prevails. Ample slack conditions are expected throughout the time frame in which monetary policy operates.

USD/MXN has risen sharply for four straight days and was higher today until the turn in sentiment. There has been some mild peso selling on these headlines but that coincides with another small slip in sentiment more broadly.

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