FX November 05, 2018 / 12:59 pm UTC

Mexico Flows: MXN Back to 20.10 on Negative Global Backdrop

By Priscila Robledo

MXN is losing ground along most EM peers and commodity prices, pressured by reduced hopes for an improved trade relation between the U.S. and China. Yesterday, white house adviser Larry Kudlow downplayed a potential deal with China by saying that "President Trump told me he would make a deal with China, but it has to be a deal that is strong and in America's interest". Kudlow's comments were followed by Chinese president Xi Jinoing speech denouncing a "winner takes all" attitude to international trade at the Shanghai trade fair, and showing no intention to meet President Trump demands. MXN is losing 0.45% to 20.1042.

Data-wise, only domestic vehicle sales and September leading indicator are in the agenda, though neither is considered top tier and we don't expect a significant market impact from the releases. There are no significant events in the U.S. either.

MXN is moving along with EMs, but the market remains pessimistic about the incoming government's policies. A hawkish Fed will put MXN back above 20.20.

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