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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MEXICO
- The impressive rally for the Mexican peso is showing few signs of abating, with yesterday's USDMXN sell-off reinforcing current conditions and once again marking a resumption of the technical downtrend. Price action this morning shows a consistent grind lower, and the pair tracks a further 0.3% in the red on Tuesday.
- USDMXN weakness is bolstered by the USD Index net position consolidating at the lowest level since 2021, according to the latest CFTC report. The move lower opens 16.2159, the 1.50 projection of the Dec 5 - Jan 8 - Jan 17 price swing. Further weakness would place the focus on 16.1238, the 1.618 projection. On the upside, key resistance is at 16.6351, the 20-day EMA.
- Three key factors continue to support the attractiveness/resilience of the ‘super’ peso. Firstly, the well touted nearshoring thesis which bolsters the country’s economic growth prospects across different sectors. Secondly, declining risk premium attached to the presidential election in June amid the strong likelihood of policy continuity under a Sheinbaum government. Lastly, the ongoing cautious/hawkish approach from Banxico, which underpins the peso’s attractive carry profile.
- On this last point, the Bank of Mexico’s March rate cut does not necessarily signal the start of an easing cycle, a former Banxico economist recently told MNI, adding that officials could keep the policy rate unchanged or even raise it again if inflation worsens. Full piece here: https://marketnews.com/mni-interview-banxico-unlikely-to-cut-every-meeting-soriano
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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