This is as expected
The Mexico's central bank has raised the overnight rate to 7.0% from 6.75%. The rise was expected.
- One member voted to keep rates unchanged
- Hiked rate to strengthen anchoring of inflation expectations
- Will closely monitor pass through to inflation from FX, energy prices
- rrisks to growth tilted to the downside, with some improvement on the margin
- will monitor evolution of output gap and relative monetary policy stance with US
- foresees annual inflation rate reaching maximum level in coming months
- Foresees inflation rate converging toward target toward Q4 of 2018
The USDMXN has dipped below its 100 and 200 hour MAs on the hike. Stay below is more bearish. The 61.8% a 18.0428 is the next target with 18.000 after that as a key target. The low has reached 17.8790.
