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MEXICAN PESO RECOVERS AFTER REACHING MULTI-MONTH PEAK ON RISK AVERSION

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  • Mexican Peso recovers from yearly low, trades at 19.57, still down over 2%.
  • Safe-haven demand for Yen and Franc amid turmoil impacts emerging market currencies.
  • Wall Street indices' losses heighten financial market stress, affecting USD/MXN volatility.
  • Upcoming Mexico data: Auto Exports (Tuesday), Inflation, Banxico decision (Thursday).

The Mexican Peso trims some of its earlier losses held during the Asian session on Monday, with the emerging market currency depreciating almost 6% to a yearly low of 20.22. The USD/MXN is trading back below the 20.00 figure, but still the Peso is down over 1%, exchanging hands at 19.32.

Market sentiment remains sour across the globe, triggering a flight to safe-haven assets like the Japanese Yen and the Swiss Franc in the FX space. Against emerging market currencies, flows outside the latter bolstered the Greenback, which posted substantial gains against the Mexican Peso.

Meanwhile, Wall Street’s post losses between 2% to 3% among its largest indices indicate stress in the financial markets. Hence, USD/MXN traders must be aware of the market mood, which could spark volatility in the exotic pair.

Mexico’s economic docket will be light at the beginning of the week but gains traction on Tuesday and Thursday. Auto Exports for July will be issued on Tuesday, followed by inflation data and the Bank of Mexico (Banxico) monetary policy decision on Thursday.



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