Rising global demand and lower oil prices under - valuates the MXN in the short term, as compared to its long term fair value. At the moment, Mexico's monetary policy is completely tied with the U.S. The traders do not expect December inflation data which is scheduled for Thursday to be a market driver as it is expected to remain very low or close to 2%.  

In Latin America, the BRL is expected to continue to be one of the worst performers, as delayed approval of structural reforms and the much-needed fiscal adjustment have increased the countries spending in the past months. Stabilization of the debt/GDP will be more difficult as the damage has already been done to the economy. Brazil's inflation data for December is scheduled on Friday, with market expectations close to 11% (consensus 10.77%).

"Our economist expects a slow convergence to 3% during the next year, giving Banxico ample space to remain accommodative" - Barclays