Last week's fairly significant period of Peso weakness confirms our view that much of the upside is already priced into the MXN and that further appreciation potential is likely to be limited. 

Although Mexico's real interest rate will continue to improve as inflation continues to decline, as long as Banxico leaves interest rates unchanged, this is not a fundamental shift in monetary policy that would justify a revaluation of the Peso.

Analysts do not expect the first rate cuts until the end of the year. As long as there is no significant change, we expect the USD/MXN to remain around 17 for the time being, thanks to the still attractive real interest rate.