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Mexican Peso Proves Most Sensitive to Asia-Pac Session Sell-Off

MXN
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  • While the risk off moves in global markets associated with Israel's response to Iran led to weakness across the EM FX basket, the Mexican peso experienced substantial losses overnight which far exceeded that of other major emerging market currencies. USD/MXN spiked as much as 6.7%, its largest intraday gain since March 2020, to a high of 18.2137. A number of resistance levels have now been breached, including the 200-DMA at 17.1691 (a level not closed above since Nov 2023) as well as the 18.0000 handle.
  • Japanese brokers active at the time flagged considerable selling of MXN/JPY by retail investors, adding that compared to other currencies, huge accumulated buy-and-hold positions in the pair produced a considerable price gap. MXN/JPY dropped as much as 6.1% (down 1.5% at typing).
  • Reports that nuclear facilities in Iran were not damaged, and Fox News noting that the strike was limited in scope, resulted in a fade in the greenback from its highs. That led to a moderation of gains in USD/MXN though the pair is still 1.57% in the green at typing, with the MXN still a standout underperformer in the EM space.
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  • While the risk off moves in global markets associated with Israel's response to Iran led to weakness across the EM FX basket, the Mexican peso experienced substantial losses overnight which far exceeded that of other major emerging market currencies. USD/MXN spiked as much as 6.7%, its largest intraday gain since March 2020, to a high of 18.2137. A number of resistance levels have now been breached, including the 200-DMA at 17.1691 (a level not closed above since Nov 2023) as well as the 18.0000 handle.
  • Japanese brokers active at the time flagged considerable selling of MXN/JPY by retail investors, adding that compared to other currencies, huge accumulated buy-and-hold positions in the pair produced a considerable price gap. MXN/JPY dropped as much as 6.1% (down 1.5% at typing).
  • Reports that nuclear facilities in Iran were not damaged, and Fox News noting that the strike was limited in scope, resulted in a fade in the greenback from its highs. That led to a moderation of gains in USD/MXN though the pair is still 1.57% in the green at typing, with the MXN still a standout underperformer in the EM space.