March 16, 2023 17:24 GMT
LatAm Snapshot: Firmer Risk Backdrop Bolstering MXN Rebound
- The more supportive tone for risk sentiment has emboldened major equity indices throughout the US session on Thursday, weighing on broad dollar indices and underpinning a solid rebound for the Mexican peso. The bounce in MXNJPY underlines the reversal, now residing 3% off the intra-day lows.
- After matching the week’s high around 19.18, USDMXN (-0.70%) has also substantially reversed to the downside and printed fresh session lows of 18.80 in recent trade. Further proving the current sensitivity to the ongoing financial stability scenario playing out across global markets. As noted, 18.4707, the 20-day EMA, is the first support to watch.
- We have also seen a pullback in one-month vols to 17.28 from yesterday’s near three-year highs of 17.86.
- USDBRL is also gaining some downside momentum. Technical parameters remain unchanged here with 5.3518 marking topside resistance, the 76.4% retracement of the Jan 4 - Feb 2 bear leg and key support at 5.1012, the Mar 8 low.