Although the latest World Economic Outlook from the International Monetary Fund stressed that global growth was expected to be higher in 2017 and 2018 at 3.40% and 3.60% respectively compared to 2016, many emerging markets saw their growth forecasts revised lower. The notable downgrades were for India, Brazil, and Mexico as worsening financial conditions threaten to derail economic expansion.
However, as the report highlighted, the big unknown remains the potential impact of Donald Trump’s proposed stimulus measures, with the IMF downplaying the likely effect of any such activities. Although they roundly anticipated fiscal spending to be a driver of activity in the coming year, there were some surprises like the upgraded UK outlook despite the upcoming Brexit announcement. While the report had minimal impact on financial markets, the Peso slumped on Monday, with USDMXN rising as high as 21.7404 before retracing most losses in early Tuesday trade.