Key Quotes:
Providing further support for LatAm currencies has been the process of EM portfolios rebalancing away from CEE into LatAm. The recovery in risk appetite also shone a light on rate differentials which have supported LatAm currencies “We have long cited a primary trading range of 20.50 to 21.50 this year for USD/MXN and so far the pair has averaged 20.5 but recent developments suggest that we are more likely to see the pair trade 19.85 to 20.20 in the coming weeks before returning north of 20.50 as we move towards the middle of the year. As always, however, USD/MXN takes the stairs down and the elevator up. Broad-based risk appetite will remain the key variable to watch for USD/MXN direction in the coming weeks and months.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.