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MEXICO: MXN Stabilises Following Overnight Rout

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • The initial impact of the Trump tariff headlines on the Mexican peso has moderated ahead of the NY crossover, with USDMXN pulling back towards 20.50, comfortably off the 20.75 highs overnight. Price action continues to be capped by the post-election peak of 20.8072, a multi-year high for the pair.
  • As a reminder, Trump stated that one of his first actions in office would be the signing of the first "of my many executive orders" that will charge Mexico and Canada a 25% tariff on "all" products coming into the US.
  • Markets will toy between the notion of less liquidity and potential position squaring amid the US Thanksgiving holiday, with month-end flows also potentially impacting price action. We highlight that 21.0233 marks the next topside level, the 50% retracement of the post-COVID range.
  • Trade balance data and the quarterly inflation report are set to cross tomorrow, before the November central bank minutes are released on Thursday.
  • Separately, Chinese electric-vehicle maker BYD is finalizing plans for a factory in Mexico, a push that will test Donald Trump’s trade policies and the Mexican government’s appetite for conflict with the president-elect. Full WSJ piece here: https://www.wsj.com/business/autos/mexico-gets-cold-feet-over-new-chinese-ev-plant-after-trump-win-3b92f1c3
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  • The initial impact of the Trump tariff headlines on the Mexican peso has moderated ahead of the NY crossover, with USDMXN pulling back towards 20.50, comfortably off the 20.75 highs overnight. Price action continues to be capped by the post-election peak of 20.8072, a multi-year high for the pair.
  • As a reminder, Trump stated that one of his first actions in office would be the signing of the first "of my many executive orders" that will charge Mexico and Canada a 25% tariff on "all" products coming into the US.
  • Markets will toy between the notion of less liquidity and potential position squaring amid the US Thanksgiving holiday, with month-end flows also potentially impacting price action. We highlight that 21.0233 marks the next topside level, the 50% retracement of the post-COVID range.
  • Trade balance data and the quarterly inflation report are set to cross tomorrow, before the November central bank minutes are released on Thursday.
  • Separately, Chinese electric-vehicle maker BYD is finalizing plans for a factory in Mexico, a push that will test Donald Trump’s trade policies and the Mexican government’s appetite for conflict with the president-elect. Full WSJ piece here: https://www.wsj.com/business/autos/mexico-gets-cold-feet-over-new-chinese-ev-plant-after-trump-win-3b92f1c3