5 Aug 2015
MXN bearish tone set to persist – Rabobank
FXStreet (Edinburgh) - Christian Lawrence, Strategist at Rabobank, believes the Mexican peso could be poised for further depreciation on mainly overseas drivers.
Key Quotes
“USD/MXN broke through the previous record high of 15.5892 from back in 2009 and surged through the 16 handle into unchartered territory”.
“CFTC net speculative positioning in MXN is deep in short territory at the most stretched levels seen since the series began back in 1995”
“This sees MXN ripe for a pull-back, as does the move in the relative strength index from overbought to neutral territory”.
“That said, MXN remains vulnerable to drivers outside of its borders and in this respect there are large hurdles for the currency to navigate going forward”.
“The Greek saga continues and the issues facing the Chinese stock market are well known – both of these could trigger a surge in global risk aversion which would hurt MXN”.
“But for us the main worry for MXN is BRL. Brazil is heading from bad to worse and the potential for a political blow-up and downgrade to ‘junk’ status could weigh heavily on BRL which would drag MXN down with it”.
Key Quotes
“USD/MXN broke through the previous record high of 15.5892 from back in 2009 and surged through the 16 handle into unchartered territory”.
“CFTC net speculative positioning in MXN is deep in short territory at the most stretched levels seen since the series began back in 1995”
“This sees MXN ripe for a pull-back, as does the move in the relative strength index from overbought to neutral territory”.
“That said, MXN remains vulnerable to drivers outside of its borders and in this respect there are large hurdles for the currency to navigate going forward”.
“The Greek saga continues and the issues facing the Chinese stock market are well known – both of these could trigger a surge in global risk aversion which would hurt MXN”.
“But for us the main worry for MXN is BRL. Brazil is heading from bad to worse and the potential for a political blow-up and downgrade to ‘junk’ status could weigh heavily on BRL which would drag MXN down with it”.