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MXN Bolstered Post-Banxico, Outperforms Broader EMFX Basket

  • The lack of any dovish surprises in the Banxico decision/statement has bolstered sentiment towards the Mexican peso on Friday, reversing the majority of MXN underperformance on Thursday.
  • The move is among the strongest in the EMFX complex, notably outperforming the JPM EMFX Currency index.
  • Short-term attention for USDMXN remains on key short-term support and the bear trigger at 20.2787, Jan 18 low. A break of this level would confirm a resumption of the downtrend and open 20.2517, Nov 9 low and 20.1196, Oct 26 low.
  • EURMXN has extended the week’s losses to around 1.8% and continues to eye support at the Jan lows, just ahead of the 23.00 handle.
  • An extremely light domestic data calendar next week may keep the path of least resistance lower for the pair, assuming no further obstacles from FOMC speakers ahead of the January meeting minutes, due on Wednesday.
    • USDMXN down 0.89% at 20.3883
    • EURMXN down 1.08% at 23.2554
    • Bbg Dollar Index down 0.11% at 1174.48
    • JPMorgan EM Ccy Index up 0.30% at 53.6560

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