He Mexican Peso It has been one of the best emerging market currencies in the last two years, however, this performance is more due Interest rate Bank of America Merrill Lynch (BOFA) warned on Tuesday that the lucrative highs that influence the Mexican economy, which "hide" the weakness of the Mexican currency in the long run.
According to BofA, Bixi Naxos is playing a "tug-of-war" against economic ruin, that is, when the economic downturn pushes the peso down, the Bixi Nixon increases interest rates, and returns its strength to the currency.
In most recent large-scale sales of pesos, "BofA notes," BofA noted in an analysis that, "so far, the bixie nosy seems to be getting stronger, causing the real exchange rate to gradually move away from its long-term downward trend." It was of relatively limited magnitude and very short-lived, as Ban Naxico indicated that it would adjust the policy in response to shocks affecting the currency.
He added that the problem with this "tug-of-war" game is that strong weight is a "Misprint " That some of the policies implemented by the new administration are not harmful to the economy and, therefore, postpone the necessary course correction.
However, the U.S. The bank maintained a long-term bearish bias in the peso, as the evolving rupture of the core of the economic base was structurally consistent with a weak exchange rate.
"We expect pressure episodes, but it will be difficult to see an upward trend due to the anecdotal differences between the local and dollar interest rates, despite the low probability of baxter nicks," he said.