The small rise in Mexican inflation, to 4.6% y/y last month, from 4.5% y/y in June, was due almost entirely to a rise in energy inflation, while core inflation fell to an 18-month low. The next interest rate decision will hinge largely on moves in the currency market, and by extension developments on the trade front. But as things stand, with the peso strengthening and core inflation easing, it is looking more likely that Banxico will leave rates on hold rather than hike rates again at its next meeting.
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