Mexico’s Central Bank Downgrades Growth Forecast, Peso Mixed

The Mexican pesos fell against the euro today after the nation’s central bank downgraded its forecast for economic growth this year. The currency managed to gain on the US dollar despite the negative news.
The Bank of Mexico revised its growth forecast for 2014 from 3–4 percent to 2.3–3.33 percent. The prediction for the next year remained unchanged at 3.2–4.2 percent. Central bank’s President Agustin Carstens was not pessimistic despite the poorer outlook, saying:

The most important part of the deceleration may have already taken place, and we expect more vigorous growth going forward.

The Mexican economy has not been able to meet expectations for the most part of the last year. Carstens explained the worse-than-expected economic performance by “a temporary bump that to a great extent reflects the slowdown in the US”.
USD/MXN was down from 12.9274 to 12.9125 as of 4:14 GMT today. EUR/MXN advanced from 17.6934 to 17.6489.

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