Moody's revises down estimated economic growth in Mexico this year from 1% to 0.9% due to coronavirus

Moody's revises down estimated economic growth in Mexico this year from 1% to 0.9% due to coronavirus. The comments follow the outbreak of the coronavirus and the price war in oil. 

Key comments

• Moody's: Falling oil prices increase risks to Mexico's sovereign credit rating.

FX implications

• USD/MXN  jumps above 21.00 as Wall Street tumbles

The volatility shock to positioning and the impact of the collapse in oil prices come at a very bad time for Mexico, with implications for the currency that are likely to be felt through the duration of 2020.

The impact of the oil price collapse will potentially be severe, as Pemex and Sovereign ratings downgrade risk rises once again, with little fiscal room to maneuver for the government given challenging growth dynamics,

– analysts at TD Securities explained.