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Banxico set to stay on hold in 2026 to support MXN carry
Rabobank expects inflation to converge later, pushing Banxico’s pause to continue through 2026 and 2027.
Rabobank analysts Molly Schwartz and Christian Lawrence said Mexico’s central bank, Banxico, is likely to keep its overnight policy rate at 6.50% after unanimously holding it on August 6.
They pointed to delayed inflation convergence to Q4 2027 and still-upside risks as reasons Banxico should remain on hold throughout 2026 and 2027, which they said supports the Mexican peso’s relative carry appeal.
The FXStreet note also framed the broader setup for currency markets ahead of US data, highlighting that the US dollar has been resilient and that traders are looking to the July US Nonfarm Payrolls release for direction.
FXStreet said the US Bureau of Labor Statistics will publish July Nonfarm Payrolls on Friday at 12:30 GMT, with market expectations calling for hiring growth of 80K after June’s 57K print and the unemployment rate steady at 4.2%.