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MEXICO: Broad Risk-Off Halts Peso Recovery

MEXICO
  • The Mexican peso traded well on Thursday following comments from Banxico Governor Rodriduez saying that the central bank could intervene to restore order if FX volatility ever becomes extreme. USDMXN consistently edged lower from 18.80 to 18.40 throughout the session, extending the peso’s recovery from the mid-week lows.
  • Today’s negative risk spillovers have hampered this recovery and USDMXN is seen up 1.20% on the session at 18.60 as the US session begins. The short-term emphasis will remain on both global and domestic political factors as upcoming elections in Europe and the reform trajectory in Mexico cement an uncertain backdrop.
  • No data for Mexico today will keep the focus on the preliminary read of UMich US sentiment and inflation expectations data. Next week, attention will be on retail sales and economic activity data before inflation data and the June Banxico decision take the spotlight on June 24 and 27 respectively. 

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