MEXICO: Central Banker Says Peso Rally May Require Interest Rate Cut.

BLOOMBERG/
   Central bank Governor Agustin Carstens says he will consider interest rate cuts in 2011 to cool the peso’s record rally.
    “If the central bank perceives it is left alone in the currency war and the peso is losing competitiveness, then the central bank might consider measures including using monetary policy to discourage inflows,” said economist Jimena Zuniga.
      The peso has gained 6.7 percent this year to 12.2667  vs usd. Only Colombia's peso has gained more among  Latin American currencies, rising 10 percent since Dec. 31.

MEXICO: Pimco Predicts Peso Will Rise 20%.

BLOOMBERG/
Pimco predicts that Mexico’s peso may rise as much as 20 percent against the dollar next year because it is one of the cheapest in emerging markets and exports to the U.S. are set to grow. Pimco’s call about the peso -- the second-worst performer among the 16 major currencies in the past year after the Taiwanese dollar -- is more bullish than the consensus forecast. Economists predict the peso will rise 3.3 percent to 12.5 per dollar by the end of 2010 from 12.9099 today.