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MXN: USDMXN Through Monday Lows, Falls 0.75%

MXN
LatAm Bank - PreviewEM BulletBank of Mexico - PreviewMexicoAnalysisEM Central Bank ReportsEM Central Bank PreviewBulletGlobalEmerging Market NewsRegion
  • Lower US yields and a bounce for US stocks have helped the MXN to recover on Tuesday, with USDMXN extending session lows in recent trade and down 0.75% on the session. The moves coincide with President AMLO appearing unnerved by the post-election peso depreciation and claiming it is currently at a ‘good level’. 
  • Price action marks a solid turnaround from the overnight 18.4953 high, however this still appears to be a correction from the technical bullish trend. Support to watch lies at 18.1137, the 20-day EMA. It was recently pierced, and a clear break would expose the 50-day EMA at 17.6521.
  • As a reminder, Goldman Sachs recently noted that they think MXN longs look increasingly attractive from a total return perspective as USDMXN has been gradually reversing lower and the local news flow has turned more supportive on the margin.
  • From a levels perspective and potentially countering this view, in the short term, Banorte suggest taking advantage of levels below USD/MXN 18.00 for tactical USD purchases.
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  • Lower US yields and a bounce for US stocks have helped the MXN to recover on Tuesday, with USDMXN extending session lows in recent trade and down 0.75% on the session. The moves coincide with President AMLO appearing unnerved by the post-election peso depreciation and claiming it is currently at a ‘good level’. 
  • Price action marks a solid turnaround from the overnight 18.4953 high, however this still appears to be a correction from the technical bullish trend. Support to watch lies at 18.1137, the 20-day EMA. It was recently pierced, and a clear break would expose the 50-day EMA at 17.6521.
  • As a reminder, Goldman Sachs recently noted that they think MXN longs look increasingly attractive from a total return perspective as USDMXN has been gradually reversing lower and the local news flow has turned more supportive on the margin.
  • From a levels perspective and potentially countering this view, in the short term, Banorte suggest taking advantage of levels below USD/MXN 18.00 for tactical USD purchases.