GBP/MXN Exchange Rate Steady Following Banco de Mexico Rate Decision
The Pound Mexican Peso (GBP/MXN) exchange rate is trending in a narrow range this morning as an upbeat outlook from the Bank of Mexico yesterday evening helping to stem losses in the Peso.
At the time of writing the Pound Mexican Peso GBP/MXN exchange rate is trading close to its opening levels this morning as the pairing consolidates its gains following yesterday’s jump.
Mexican Peso (MXN) Resilient Following Central Bank Rate Decision
The Mexican Peso (MXN) is holding its ground against the Pound this morning after yesterday’s rate decision by the Banco De Mexico.
While the bank made no changes to its monetary policy, leaving interest rates at 7.75%, a near decade high, a broadly upbeat tone from the bank following the signing of the USMCA trade agreement led to a more resilient Peso on Thursday.
In its accompanying statement, Mexico’s central bank maintains a hawkish tone, suggesting it remained open to future interest rate hikes should the inflation continue to run hot.
The bank’s policy statement read:
‘The central bank will take the necessary actions, specifically, maintaining or possibly strengthening the current monetary policy stance so that headline inflation converges.’
Pound (GBP) Exchange Rates Steady amid Renewed Brexit Optimism
At the same time, the Pound (GBP) remains well positioned in currency markets this morning after shooting higher on Thursday on the back of reports that Ireland would support Theresa May’s Brexit plans.
The reports suggest Dublin will back May’s proposal to avoid a hard border with Ireland by adopting an all-UK customs union with the EU.
Its hoped this will help to solve the issue of the Irish border, allowing Brexit negotiations to progress and possibly allowing for a deal to be finalised between the UK and EU in the next couple of weeks.
GBP/MXN Exchange Rate Forecast: Brexit to Dominate in Build up to EU Summit
Looking ahead, Brexit looks to remain the main catalyst of movement in the Pound Mexican Peso (GBP/MXN) exchange rate over the next couple of weeks as we rapidly approach the next EU summit on the 18th.
This is likely to result in some notable volatility in Sterling depending on how negotiations progress, with the currency poised to rocket should the UK and EU be able to reach an agreement.
Meanwhile MXN investors are likely to be focused on Mexico’s upcoming CPI figures as they look for any signs that inflationary pressure may be building once again and whether it will be enough to prompt a response from the central bank.
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