Banxico keeps strong the Fed tether - TDS

FXStreet (Delhi) – Research Team at TDS, notes that the Banxico follows the Fed into a rate hike despite lower than expected inflation, and an inflation profile that was already seen as convergent to target in the short and medium term.

Key Quotes

“Banxico has reiterated its Fed dependency, citing concern over a disorderly depreciation in MXN, and the risk of a subsequent impact on inflation and inflation expectations.”

“We see Banxico following the Fed with another hike in Q1, however after which the policy tether may weaken.”