Mexico's central bank Banxico is set to raise its key interest rate today by another 75 basis points. As in the market it seems to be largely priced in, the statement will determine if the Mexican peso can strengthen, economists at Commerzbank report.

Banxico likely to add 75 bps

“We expect Banxico to raise the policy rate to 8.5% and also maintain the outlook for further rate increases. An even bigger rate step cannot be ruled out and would probably boost the peso which was recently able to gain ground against the USD, at least temporarily; however, it seems less likely to us.”

“If Banxico delivers as generally expected, it will probably depend primarily on the statement whether the peso can benefit additionally because much seems to be priced in already.”