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Rising Yields Prompt Sharp Move Lower In Local Currencies

LATAM FX
  • Sharp move higher in the US dollar versus MXN and CLP largely attributed to US 10-yr yields reaching their highest levels since April 13th, approaching 1.68%, and EMFX playing catch up.
  • USDMXN breaking yesterday's highs through 20.0858 has exacerbated the sharp move higher, seen over 1% firmer with more notable resistance residing at 20.2427, April 13th high.
    • No local headlines attributed to the move
    • TIIE curve bear steepening in line with Peso weakness and rising global yields.
  • After testing down at 694.23, USDCLP has reversed and closed the overnight gap immediately, firming back to 700. Yesterday's high of 703.72 will be the first point of resistance.
  • BRL holding in relatively well given the moves so far.

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