06:52 AM EST, 11/08/2024 (MT Newswires) -- The Mexican peso remains challenged, and with immigration and trade key topics in incoming President Donald Trump's United States election campaign, it will likely be exposed to further swings in the coming months, said UBS.

Domestically, the government's reform agenda is also doing little to instill investor confidence, wrote the bank in a note to clients.

Against this backdrop, Mexico's central bank (Banxico) is meeting next week.

Headline inflation rose to 4.7% in the first half of October,

up from 4.6% in September, largely due to higher prices for

fresh fruit and vegetables after three months of declines.

Meanwhile, core inflation continued its downward trend,

reaching 3.9%.

Amid slowing growth, UBS expects Banxico to cut its policy rate again by 25 basis points -- currently it's at 10.50% -- as the Mexican peso's reaction to the outcome of the US election hasn't been disorderly so far.