[Exim] Smart Host

I need my server to receive email for domain 'xyz.com' and then forward all
email to the exchange server for that domain.
I have the following configon exim:

domainlist smart_apc = xyz.com

smart_route:
driver = manualroute
domains = smart_apc
transport = remote_smtp
route_list = xyz.com exchange.xyz.com

On the DNS I have mail.xyz.com (MX) as the exim server IP, and
exchange.xyz.com as the exchange servers IP.

If I telnet into exim and send email to the xyz.com domain it gets delivered.

When I receive email from another server into exim for xyz.com, I get the
following error:
lowest numbered MX record points to local host

Anyone have any advice.
Paulo