Mexican Peso Heads for Largest Monthly Rise in 5 Years as GOP Agenda Falters Joseph Adinolfi - MarketsReport
go to original March 25, 2017

Bank of Mexico Governor Agustin Carstens explains why he believes the Mexican peso may be undervalued up to no more that 10 percent, even with the uncertainty surrounding relations between Mexico and the U.S. (Bloomberg)

Update: Mexico Gets $22B Bonus from Peso's Plunge Thanks to Donald Trump (Financial Review)

The Mexican peso is headed for its largest monthly gain in nearly five years as President Donald Trump and his partisans suffer the first major legislative setback of his presidency.

This looming milestone represents drastic and, many believed, improbable, turnaround for the peso, the most heavily traded currency in Latin America: Two months ago, just as Trump was preparing to take the oath of office, the currency plunged to an all-time low. It has risen nearly 10% against the dollar since then, and since the beginning of March, the greenback has slid nearly 7% against the peso.

...It appears now that markets were too quick to price in the economic impact of Trump’s promised fiscal policies. Since the beginning of the year, the dollar has weakened broadly against most rivals, suffering its largest decline against emerging-market currencies like the peso and Brazilian real.

But even if Trump is able to ram through his fiscal agenda in the coming months, which seems unlikely, one of the most reliable indicators of currency trading suggests that the peso rally has more room to run.

Read the rest at MarketWatch

Related: Mexican Leftist Lopez Obrador Casts Shadow Over Mexican Banking Convention (Reuters)

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