In late September, the Mexico’s central bank cut rates for a second time. The central bank said that the risks for the economy remain biased toward slower-than-expected growth after Mexico narrowly escaped recession in the first half of year. However, two of its members voted for a faster pace of monetary easing.
In mid-November, the Mexico’s central bank cut rates for a third time this year. The bank voted to cut borrowing costs, lowering its key interest rate by 25 basis points to 7.50% due to economic growth outlook worsened in recent months.
Mexico’ central bank said in the statement accompanying its decision that both inflation and growth for this year and next will likely be below previous forecasts, although core inflation has remained persistent.
And today, Mexico’s central bank cut rates for a fourth time in 2019.
The Mexican central bank on Thursday cut its benchmark interest rate to 7.25%, as expected, citing softening headline inflation and slack in the economy, but highlighted concern that a recent minimum wage hike could stoke price pressures.
The five-member board of Banxico, as the Bank of Mexico is known, voted 4 to 1 to lower the rate by 25 basis points, the post meeting statement showed. One member wanted a 50 basis point cut to 7.0%.
“For 2020, core and headline inflation will reflect both the greater amount of slack in the economy and the cost-related pressures resulting from the recent minimum wage revisions, which could locate them moderately above the levels anticipated in the last quarterly report,” the statement said.
So where is the Peso headed next, lets go to the charts?
Monthly Chart (Curve Time Frame) - monthly supply is at 0.05600 and monthly demand is at 0.04600.
Weekly Chart (Trend Time Frame) – the trend is sideways.
Daily Chart (Entry Time Frame) – no trade set-up at the moment. The chart suggests to play the price extremes.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
