USD/MXN remains aorund 3-week highs after Banxico inflation report

The Mexican peso moved modestly of daily lows after the release of the Quarterly Inflation report from the Bank of Mexico (Banxico). USD/MXN remained above 18.80, near the highest level of the day, supported by a decline in crude oil prices.

Eyes 19.00

Earlier today, a stronger US dollar, particularly against Latin American currencies boosted USD/MXN to 18.89, levels last seen 3 weeks ago.  Greenback is rising for the fourth day in a row against the peso as it continues to move toward 19.00, that is a key psychological level, that capped the upside during July and early August.

Banxico downgrades GDP forecasts

The central bank of Mexico downgraded GDP forecast for 2016 from 2.0-3.0% to 1.7-2.5% and 2017 projections were lowered from 2.3-3.3% to 2.0-3.0%. The next monetary policy meeting will be on September 29 but no changed in monetary policy is expected but markets consensus could change if the week earlier the Federal Reserve raises rates.