- Emerging market currencies under pressure in the face of risk aversion climate.
- USD / MXN advances but still remains in recent range.
A general rise in the dollar before a fall in the markets throughout the world, pushed the USD / MXN that climbed to 20.06, reaching the highest level since last Tuesday. Despite the advance, the price remains in the recent range.
Negative weather increases USD / MXN bullish risks
Wall Street futures point to an open with falls in the order of 1% for the main indices. In Europe, stock market falls exceed 2.5% on average. Adverse weather, partly due to the growth in cases of the delta variant of the coronavirus, is putting pressure on emerging market currencies and favoring demand for the dollar and the yen.
Demand for the dollar is not affected by the decline in the yields of Treasury bonds, which occurs due to a greater attractiveness of safe haven assets. The 10-year rate is at its lowest since February at 1.25%. If risk aversion persists, it is expected that it will favor increases in USD / MXN.
The Mexican peso is falling, but it is not one of those that falls the most. The USD / MXN rose to 20.06 and is trading at 19.95. The cross remains in the range that takes weeks between 19.70 and 20.10 (broad). As long as you stay between those levels, the outlook will continue to favor side tours.