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USD/MXN rate trades near the highest...>

MEXICAN PESO
MEXICAN PESO: USD/MXN rate trades near the highest levels of the session,
topping out at 18.8968 so far Tuesday, to consolidate some of the MXN strength
seen in recent weeks. In vol markets, MXN contrasts with other LatAM and EMFX,
as USD/MXN vols remains particularly low, with the 1m measure sitting just above
the recent cycle lows of 8.613 points. Markets continue to price in a higher
likelihood of the Banxico raising interest rates in their coming meetings, with
the market-implied probability of a hike at May's meeting rising to just shy of
30% from close to zero in mid-March.
-CFTC data released late last week has drawn a fair amount of attention, with
speculative long contracts in MXN hitting all time highs (however, the rise may
be a result of increased use of the contract as well as more bullish sentiment
as open interest hit all time highs this quarter).
-Unemployment rate data due in just under one hour's time takes focus from here
ahead of retail sales on Thursday and trade balance data Friday.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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