MNI: US Consumers See Lower Inflation, Better Jobs - NY Fed

MNI BRIEF: Risks To Growth Evident, Await Dec Forecasts -Rehn

MNI China Daily Summary: Tuesday, November 12

MNI BRIEF: Prolonged Tightening If Expectations Worsen - BCB

MNI: PBOC Net Injects CNY107.2 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1927 Tues; +1.32% Y/Y

EZ/UK Bond Supply Calendar: IT, UK, DE, PO Auction Wednesday

MNI: US REDBOOK: NOV STORE SALES +4.8% V YR AGO MO

MNI: CANADIAN SEP BUILDING PERMITS +11.5% MOM

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

MEXICO: Wells Fargo Recommends Long USDMXN Position

MEXICO
EM BulletHomepagemarkets-real-timeMexicoBulletGlobalEmerging Market NewsRegionNorth America
  • Wells Fargo recommends going long USDMXN with a target of 22.50 and a stop-loss at 19.50, noting that increased fiscal and institutional risks in Mexico, combined with the more challenging external backdrop, point to a weaker peso ahead.
  • Wells Fargo also believes that the peso is approximately 8% overvalued on a medium-term basis, according to Bloomberg, and that the upcoming 2025 budget, which will be presented to Congress by the end of this week, will disappoint expectations for fiscal consolidation.
  • Following the election victory of Donald Trump, they also expect relations between Mexico and the US to become more challenging, ahead of discussions around the USMCA. Meanwhile, the central bank is expected to be reactive to higher FX vol, amid ongoing domestic macro pressures.
122 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Wells Fargo recommends going long USDMXN with a target of 22.50 and a stop-loss at 19.50, noting that increased fiscal and institutional risks in Mexico, combined with the more challenging external backdrop, point to a weaker peso ahead.
  • Wells Fargo also believes that the peso is approximately 8% overvalued on a medium-term basis, according to Bloomberg, and that the upcoming 2025 budget, which will be presented to Congress by the end of this week, will disappoint expectations for fiscal consolidation.
  • Following the election victory of Donald Trump, they also expect relations between Mexico and the US to become more challenging, ahead of discussions around the USMCA. Meanwhile, the central bank is expected to be reactive to higher FX vol, amid ongoing domestic macro pressures.