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19 Mar 2015
Mexico: stay bullish the peso – BAML
FXStreet (Edinburgh) - According to analysts at BAML, the outlook for the Mexican peso remains bullish.
Key Quotes
“We maintain our bullish view on MXN”.
“The Fed sounded rather dovish on 18 March, which should put the brakes on USD strengthening and support oil and equity prices, all of which bodes well for the Mexican peso according to our regression results”.
“We also expect short-term TIIE swap rates to decline since Bank of Mexico will face less pressure to hike rates in the near term”.
“We recommend short USD/MXN (spot 15.14) and short EUR/MXN (spot 16.34) given our view that the currency is fundamentally cheap, preferably in option format via put spreads, and positioned to benefit from a relatively low skew”.
Key Quotes
“We maintain our bullish view on MXN”.
“The Fed sounded rather dovish on 18 March, which should put the brakes on USD strengthening and support oil and equity prices, all of which bodes well for the Mexican peso according to our regression results”.
“We also expect short-term TIIE swap rates to decline since Bank of Mexico will face less pressure to hike rates in the near term”.
“We recommend short USD/MXN (spot 15.14) and short EUR/MXN (spot 16.34) given our view that the currency is fundamentally cheap, preferably in option format via put spreads, and positioned to benefit from a relatively low skew”.