USD/MXN needs to reach 16.50 levels to start contaminating CPI expected trend: Barclays

Quotes from Barclays Capital:

-Banxico board believes that inflation will remain close to 3% throughout 2015 and close to target in 2016. It is worth highlighting that according to the report, the main concern on inflation dynamics is the FX pass-through.

-Governor Carstens has mentioned that Banxico will react if it perceives evidence of a pass-through to inflation, although it has been very limited so far. In our view, the USDMXN needs to reach 16.50 levels in the very short term to start contaminating the CPI expected trend.