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Rollover in US Yields Helps MXN, BRL Back into Positive Territory

LATAM FX
  • US yields continue to rollover, with short-covering in Treasury futures helping drag belly- and longer-end yields comfortably off the NFP-inspired highs. The moves are undermining the earlier greenback strength and allowing for a relief rally across EM currencies and, notably, Latam.
  • USD/MXN has shed close to 1.4% off the 18.4863 high, and now sits below yesterday's close, while USD/BRL inches back to trade close to flat on the session. Worth noting for USD/BRL, a negative close for the pair today would be the first since Monday, however the uptrend characterised by five consecutive sessions of higher highs signals the upside momentum in the near-term.

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