Bloomberg – The Mexican Peso is about to end a volatile week with little difference, Retreating for a second day on Friday, still far from the year-to-date low hit on Tuesday.
The currency fell 0.05% to 20.9498 Mexican pesos per dollar. The peso’s one-month implied volatility extended its four-day low to 13.835%, the lowest in one week.
The $21.50 level for the dollar, which was last seen in early December, remains supportive of the peso in the short term. On Tuesday, the coin fell to a 2022 low of $21.4676. Further advance in the peso could cause the currency to test the 100-day moving average at $20.6882 and then the 50-day moving average at $20.5527.
Flows have become more balanced since Wednesday’s 2.2% rise. Real money accounts and banks were selling pesos, while corporate accounts and hedge funds bought the currency, according to a London-based trader.
TIIE interest rate swaps rose in Mexico on Friday. TIIE’s two-year rates are up 38 basis points so far this week. The curve now discounts about 280 basis points from the price hike by the end of the year, with seven regular Banxico meetings.
The 50 basis point rate hike this month is fully priced. The Citibanamex survey also indicated that the next rate move will be 50 basis points this month.
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