Mexico: Banxico Intervention Risk Rising – TDS
Sacha Tihanyi, Senior EM Strategist at TD Securities, suggests that the
MXN trading conditions, relative to a set of indicators, suggest that
the peso is in the midst of becoming “unhinged” again, in much the same
way that led Banxico to unexpectedly intervene in the FX market and hike
rates in February.
Key Quotes
“ We believe that if current trading conditions persist long enough (2
to 3 more weeks) Banxico will likely move to intervene in USDMXN, though
we expect that a rate action is much less likely (outside of a move
with the Fed), given domestic economic risks.”
