Economics: Cost-push and further peso spike

MEXICO - Report 10 Jun 2015 by Mauricio Gonzalez and Ernesto Cervera

Executive Summary The depreciation and volatility that the Mexican peso has experienced in relation to the dollar since late last year is something that one would be ill-advised to try to minimize. As is widely known, much of the peso's recent depreciation (and volatility) is explained not only by expectations that the Federal Reserve will, in the not-too-distant future, raise its key reference rate (an eventuality that markets have already discounted), but also the precise timing with which the US monetary authority will make such a move.In this context, analysts in general are trying to a...

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