07:50 AM EDT, 05/09/2025 (MT Newswires) -- With relatively contained inflation and economic

momentum fading, the case for cutting interest rates in

Mexico is growing stronger, said UBS.

Markets are already pricing close to 200bps of easing over the next 12 months at Banxico, roughly in line with the bank's expectations.

This includes a 50bps cut next Thursday -- currently at 9.00% -- still leaving the peso (MNX) with a "sizable" carry advantage over the US dollar (USD) for now, even though the gap between Mexican and United States rates is likely to narrow, added UBS.

With Mexico less in focus in terms of tariffs recently, the bank expects the peso to remain relatively resilient.