- Banxy Board sees increased economic risks for relaxation and disadvantage and strengthens expectations for further cuts.
- Most have seen proper MXN trading and improved liquidity conditions despite external volatility.
- USD/MXN could test 20.00 if support at 20.30 breaks; The risk up is only over 20.50.
On Thursday, April 10, Banco de Mexico (Bancoco) published his latest meeting records in which all members of the Board of Directors said that the Mexican economy would slow in the middle of the developing disinfectant process that prepares the way for further relaxation.
Key offers Banxyo’s Meeting:
The Council estimates that looking in the future could continue to calibrate the attitude of monetary policy and consider adaptation in similar sizes.
Most members of the Board of Directors stated that the economy is expected to show increased sagging.
Most members of the Board of Directors stated that the MXN Terms and Conditions remained proper and even showed improvements during this period.
Most said the balance of risks for economic activity is biased at the disadvantage.
Most of them indicated that the risks for inflation gained significance.
Most Board of Directors said that the expected weakness of economic activity and greater conditions for release will contribute to the continuation of the disinfecting process.
One member of the Board of Directors stated that the estimate of Flash in February indicates that the contractions will be expanded to this month.
The scenario of high and permanent tariffs on all American imports from Mexico is likely to happen.
USD/MXN prices: Technical outlook
Although USD/MXN remains distorted at the top, a decline below the area of ​​20.30 could prepare a way for further losses. The next level of key support lies at 20:00, followed by a 200 -day simple gliding average (SMA) at 19.83. If it was overcome, the next stop would be 19.50. On the contrary, the bull sequel will appear if the buyer moves a couple around the 20.50 area with another number 21.00.
Banxico FAQ
Mexico, also known as Banxico, is a central bank of the country. Its mission is to maintain the value of Mexican currency, Mexican peso (MXN) and determine monetary policy. For this purpose, its main goal is to maintain low and stable inflation at the target level – at or near the target 3%, center in the tolerance zone between 2%and 4%.
The main tool for Banxiko for monetary policy management is to determine interest rates. When inflation is above the goal, the bank will try to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cool the economy. Higher interest rates are generally positive for Mexican peso (MXN) because they lead to higher yields, which makes the country a more attractive place for investors. On the other hand, lower interest rates tend to weaken MXN. The key factor is the rate of differential rate with USD or, as is expected to set interest rates compared to the US Federal Reserve (Fed).
Banuxico meets eight times a year and its monetary policy is greatly influenced by the decisions of the US federal reserve system (Fed). Therefore, the Central Bank’s decision committee usually collects a week after the Fed. At the same time, Banxico responds and sometimes expects monetary policy measures determined by a federal reserve. For example, after the COVID-19 pandemic, before the Fed raised rates, Banxico first attempted to reduce the chances of essential depreciation of Mexican peso (MXN) and prevent papers that could distribute the country.
