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MEXICO: Trump/Sheinbaum Discussions Give Peso Substantial Boost

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • USDMXN has extended the overnight sell-off to around 1.6% in early European trade. The march higher for the peso has been triggered by President-elect Trump saying he had a productive conversation with Mexico’s president Claudia Sheinbaum, with the moderation in bilateral trade risk significantly assisting the pair’s reversal.
  • In a post on Truth Social, Trump said it was a “wonderful conversation,” adding that “she has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border.” Trump also said the pair “talked about what can be done to stop the massive drug inflow into the United States, and also, U.S. consumption of these drugs.”
  • Meanwhile, Sheinbaum posted on X that in the phone conversation she told Trump that “Mexico’s stance is not to close borders, but to build bridges among governments and peoples.”
  • This plays into how some analysts believed the determined President-Elect wanted Mexico to offer him something early, so that he can finalise negotiations very early into his administration. This swift reversal of rhetoric is also reminiscent of tactics employed in 2019.
  • For USDMXN, a potential double top just above 20.80 will be monitored closely in coming sessions. Spot has already pierced the 20-day EMA around 20.29 and next immediate support is 20.0656, the Nov 19 low.
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  • USDMXN has extended the overnight sell-off to around 1.6% in early European trade. The march higher for the peso has been triggered by President-elect Trump saying he had a productive conversation with Mexico’s president Claudia Sheinbaum, with the moderation in bilateral trade risk significantly assisting the pair’s reversal.
  • In a post on Truth Social, Trump said it was a “wonderful conversation,” adding that “she has agreed to stop Migration through Mexico, and into the United States, effectively closing our Southern Border.” Trump also said the pair “talked about what can be done to stop the massive drug inflow into the United States, and also, U.S. consumption of these drugs.”
  • Meanwhile, Sheinbaum posted on X that in the phone conversation she told Trump that “Mexico’s stance is not to close borders, but to build bridges among governments and peoples.”
  • This plays into how some analysts believed the determined President-Elect wanted Mexico to offer him something early, so that he can finalise negotiations very early into his administration. This swift reversal of rhetoric is also reminiscent of tactics employed in 2019.
  • For USDMXN, a potential double top just above 20.80 will be monitored closely in coming sessions. Spot has already pierced the 20-day EMA around 20.29 and next immediate support is 20.0656, the Nov 19 low.