Peso Plummets Following Recent Central Bank Announcement
• Bank of Mexico Lowers 2014-16 GDP Growth Outlook
• Peso Declines to a Two-Week Low Against US Dollar
The Mexican Peso accelerated downward against the US Dollar after the Bank of Mexico downgraded its outlook for GDP growth through 2016 in its Inflation Report. Policymakers lowered the expected upper bound on 2014 GDP expansion to 2.5 percent from 2.8 percent seen previously. The upper bound on projected growth in 2015 and 2016 were likewise lowered. Policymakers argued that the downgrades stem from slowing oil production and rising political unrest. The Central Bank also indicated that interest rates will remain low at their current 3 percent level for the remainder of this year. Economists surveyed by Bloomberg estimated that borrowing costs could rise as late as the second quarter of 2015. USD/MXN plunged as the Inflation Report crossed the wires, touching a two-week low.
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