We think that with the risk of surprisingly tight U.S. monetary policy diminishing as the U.S. economy decelerates, and with the peso strong, the scales are tipped to a 50bp east at the January meeting.

Going forward, we expect the economy to show positive year-on-year and seasonally adjusted rates in the quarters ahead, but the 1.8 percent Central Bank estimate appears to have more downside than upside risk at the moment.

We still see lower rates later in the year, but for now, with the economy growing at about trend and in a balanced manner, there are few reasons for policy to be altered in either direction.

I think there is risk in the market. If there is weakening in the economy, then an earnings recovery gets pushed out further into 2002.

There's more upside risk on the dollar as the rate differential still attracts buyers. The U.S. economy is on a firm footing and the Fed may raise rates at least twice by March.

The risk is that the dollar becomes stronger if there is any hint that the economy remains buoyant and the markets start to price in a greater probability of another rate hike in March.