Market Extra: The peso’s rally takes pressure off Banxico to hike rates

With the Mexican peso finally moving higher, the country’s central bank can breath a sigh of relief.

The currency’s recent recovery has taken some of the pressure off the Bank of Mexico, some market participants said, after having raised interest rates 1.5 percentage points so far this year, partly to prevent the weaker currency from sparking a sudden rise in inflation.

Over the summer, the peso USDMXN, -0.0079% depreciated sharply, eventually trading just below 20 to the dollar—a record low—as U.S. election polls showed Donald Trump closing the gap in the battle for the White House against Democratic nominee Hillary Clinton.

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