News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/33WwUNpHJg
  • Heads Up:🇺🇸 House Price Index MoM (JUL) due at 13:00 GMT (15min) Previous: 1.6% https://www.dailyfx.com/economic-calendar#2021-09-28
  • 🇨🇦 Average Weekly Earnings YoY (JUL) Actual: 1.77% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2021-09-28
  • 🇺🇸 Goods Trade Balance Adv (AUG) Actual: $-87.6B Previous: $-86.38B https://www.dailyfx.com/economic-calendar#2021-09-28
  • - At this point, it would take a very large shock to throw off start of bond taper $USD
  • Fed's Bullard - Fed being a little more aggressive would best ensure expansion - Sees two rate increases in 2022, calls for balance sheet to decline as soon as bond purchases end - Fed policy normalisation can move faster than 2007-2009 crisis, given speed of recovery
  • Heads Up:🇺🇸 Goods Trade Balance Adv (AUG) due at 12:30 GMT (15min) Previous: $-86.38B https://www.dailyfx.com/economic-calendar#2021-09-28
  • Heads Up:💶 ECB De Guindos Speech due at 12:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-28
  • Heads Up:🇨🇦 Average Weekly Earnings YoY (JUL) due at 12:30 GMT (15min) Previous: 0.7% https://www.dailyfx.com/economic-calendar#2021-09-28
  • $EURUSD taking a peek over the cliff edge, but still holding the line for now https://t.co/lKsiNLppI6
USDMXN: Banco de Mexico Increases Intervention

USDMXN: Banco de Mexico Increases Intervention

Jeremy Wagner, CEWA-M, Head of Education

Yesterday, Banco de Mexico (Mexico’s central bank) announced a commitment to sell 200 million USD daily, if needed without a minimum price movement. The bank is looking to keep the exchange rate from spiraling out of control.

With the Fed watchers speculating on a rate lift off, possibly in September 2015, emerging markets like Mexico are under pressure because those capital flows for yield investment get re-routed to the USD. As a result, the bank is playing defense on controlling significant outflows is looking to curb the rapidly increasing exchange rate.

I’m not convinced the Fed rate hike will take place in 2015. Therefore, this story may be exaggerating the price. The COT report suggests net sellers of MXN are at extreme 10 year levels.

Therefore, this presents an opportunity to short the pair using this week’s high as the stop loss level. Wave relationship show up in the 15.00-15.20 area so we are able to lock in a reasonable risk to reward ratio for short USDMXN.

Click here to view a chart with levels noted. (You can also press the play button to see the market in motion since the post was made.)

For those traders who are nervous about shorting the USD, one could consider hedging off the USD by going long USDCAD, short AUDUSD, or short NZDUSD.

To receive additional picks, sign up for Jeremy’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES