Banxico decided to leave rates on hold at 11.25%. The accompanying material provided something for everyone, hawks and doves alike.

Our base case remains for a 25 bps cut at the June 27th meeting after the Fed announces its first cut on June 12th. We remain of the view that a cut from Banxico in March is highly unlikely, but we are cognisant that there is a significant risk of a cut at the May 9th meeting.

We still favor a retest of the 17.00 handle in the coming days with 17.00-17.20 likely to dominate in the coming weeks. 

We still expect a total of 175 bps of cuts from Banxico this year and USD/MXN to trade up through the 18.00 handle in H2.