USDMXN has shown steep slumps from the peaks of 20.9619 levels to the current 19.3070 levels.
Mexican general election took place on July 1st, Voters elected a new President of Mexico to serve a term of five years and ten months; the stunning victory of Mr Andres Manuel Lopez Obrador (AMLO) finally gets elected president on his third attempt.
It is reckoned that the market has accepted a wait-and-see attitude to a potential AMLO presidency for now.
Market sentiment suggests there is comfort in the likelihood that Congressional oversight would temper reform efforts.
We think that election results with higher levels of support for AMLO and/or less effective Congressional oversight imply moves higher in USDMXN alongside higher front-end rates and wider credit spreads.
We remain paid 1y TIIE and recently recommended buying a 1m (expiry: 31 July 2018) 1x1 USDMXN call spread (spot ref: 19.3070 strikes: 20.50, 21.50) vs selling the 25-delta put (strike: 19.1673) for zero cost. Courtesy: Barclays
Currency Strength Index: FxWirePro's hourly USD spot index is flashing at -114 levels (which is bearish) while articulating (at 13:52 GMT). For more details on the index, please refer below weblink:


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