Mexico's Central bank keeps rate at 8.25%
- balance of risk remains to be tilted to the downside
- board was unanimous on rate decision
- balance of risk for inflation has upward bias environment of marked uncertainty
- will pay special attention to uncertainty, pass-through of exchange rate on prices, relative monetary policy between US Fed and Mexico
- medium and long-term macro risks mean it is particularly important government meets the fiscal targets set in 2019 budget
- some risk factors related to economy have led to local assets trading at a discount, or at additional risk premium
The USDMXN has traded down to the 200 day MA at 19.3330 level. The pair has been rallying over the last week or so of trading and in the procecss closed above the 200 day MA yesterday. Earlier in the month, the high price stalled ahead of the 100 day MA (blue line). If the price were to close back below the 200 day MA, traders might sour on the upsidie potential for the pair.
In contrast, stay above and a run toward a retest of the 100 day MA will be eyed.
