EMERGING MARKETS-Mexico peso firms on rate hike bets, weaker U.S. dollar

02/22/2018 Reuters

peso by Guanatos GwynLatin American currencies gained on Thursday as the U.S. dollar’s rally from a three-year low last week ran out of steam, with the Mexican peso strengthening more than 1 percent on strong bets Mexico’s central bank could again hike interest rates.

Minutes of the latest monetary policy meeting showed
Mexico’s central bank board members are concerned about
persistent inflation pressures and risks that the local currency
could be hammered, adding to consumer price pressures.

Mexico’s peso strengthened 1.15 percent on Thursday
even as consumer prices in Latin America’s second largest
economy rose less than expected in early February.
“The probability that Banco de Mexico keeps hiking the key
interest rate is still high,” said Gabriela Siller, head of
economic analysis at Banco BASE.

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