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16 Jul 2015
Mexican peso could drop towards 16.00 vs. the dollar – Goldman Sachs
FXStreet (Edinburgh) - Analysts at Goldman Sachs see USD/MXN clinching the 16.00 handle within a year’s time.
Key Quotes
“We are revising our 3-, 6- and 12-month forecasts to $/MXN 15.80, 15.90 and 16.00, respectively, from 15.50, 15.70 and 15.75, respectively”.
“An ex ante negative real policy rate, low oil prices and declining oil production, together with a strengthening USD, will likely keep the MXN under moderate pressure in the short term”.
“Rising concern about the rapid MXN depreciation led the authorities to announce on December 8 a soft rules-based FX market intervention/stabilisation mechanism: the Central Bank auctions US$200mn whenever the spot price is at least 1.5% weaker than the previous day’s fix”.
“Furthermore, on March 11 the Bank announced that it would also sell US$52mn/day spot to the market (auctions with no minimum price). The program was renewed in June (until September 29)”.
Key Quotes
“We are revising our 3-, 6- and 12-month forecasts to $/MXN 15.80, 15.90 and 16.00, respectively, from 15.50, 15.70 and 15.75, respectively”.
“An ex ante negative real policy rate, low oil prices and declining oil production, together with a strengthening USD, will likely keep the MXN under moderate pressure in the short term”.
“Rising concern about the rapid MXN depreciation led the authorities to announce on December 8 a soft rules-based FX market intervention/stabilisation mechanism: the Central Bank auctions US$200mn whenever the spot price is at least 1.5% weaker than the previous day’s fix”.
“Furthermore, on March 11 the Bank announced that it would also sell US$52mn/day spot to the market (auctions with no minimum price). The program was renewed in June (until September 29)”.