The CAD/MXN currency pair held near a 3-week high of 12.7727 on Monday ahead of the outcome of the Bank of Canada’s policy meeting.
The Bank of Canada is expected to keep its benchmark interest rate intact at 2.25% at its April 29th policy meeting.
In March, BoC policy makers acknowledged increasing downside risks to growth, while warning that inflation risks are rising, largely driven by elevated energy prices.
The key takeaway from the March decision was the removal of prior guidance suggesting that the current policy stance was appropriate. This change signaled that the central bank was now open to further tightening if inflation pressures persist.
BoC officials indicated they might look through the immediate inflation impact of geopolitical developments, but emphasized that sustained high energy prices would not be allowed to feed into broader and more persistent inflation.
Meanwhile, MXN traders will be paying close attention to Mexico’s preliminary GDP growth figures for Q1 due out on Thursday.
The CAD/MXN currency pair was last up 0.26% on the day to trade at 12.7638.
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