USD/MXN: Above 18.53 open doors to record highs – BBH
By FXStreet According to analysts from Brown Brother Harriman, sentiment toward emerging markets will be the most important driver for Mexico and they expect the peso to remain under pressure.
Key Quotes:
“Despite having solid fundamentals, Mexican assets continue to underperform. With firmer oil prices doing little to help, we think that general EM sentiment will be the most important driver for Mexico.”
“Fed policy is the big unknown for Mexico. If it hikes at the June 15 FOMC meeting, then Banxico may follow up with a hike of its own on June 30 (…) If the Fed waits to hike at the July FOMC meeting, then Banxico will have an opportunity to hike at its August 11 meeting.”
“The external accounts are worsening but remain in fairly decent shape. Lower oil prices have hurt exports, but this has been offset a bit by weaker import demand.”
“MXN underperformance is one of the biggest puzzles this year in EM. Higher oil prices have helped RUB become one of the top EM performers this year, yet MXN is one of the worst. For USD/MXN, a clean break above the 18.53 area would set up a test of the all-time high near …read more
Source:: FX Street
