FXStreet (Edinburgh) – According to Christian Lawrence, Senior Market Strategist at Rabobank, USD/MXN appears well supported in the next months.
Key Quotes
“We remain relatively upbeat about the Mexican economy despite data disappointing somewhat relative to expectations earlier in the year”.
“That said, we are of the view that exogenous factors will remain a more important driver of MXN price action in the coming months”.
“In this respect there is much in the way of potential risk, including: tensions in the Middle East; the ongoing Greek saga; and China artificially supporting markets”.
“Furthermore, the LatAm region continues to suffer as commodity prices remain subdued, and domestic developments in Brazil are likely to continue weighing on BRL, and so in turn MXN”.
“Oil prices also have the potential to weigh on MXN, and although we see downside from current levels as somewhat limited, we do not expect a strong rebound either”.
“On the other side of the coin, the September FOMC meeting could trigger a dip in USD, which might stem some upside in USD/MXN, and positioning as well as momentum are beginning to look a little stretched”.
“It is also true that if external risks subside then MXN could recover significantly, but on balance we would argue that USD/MXN remain well supported in the coming months”.
(Market News Provided by FXstreet)