Forex Flash: Mexican macro fundamentals remain constructive as technicals deteriorate - BBH

FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy comments that as he noted last week, while Mexico's macro fundamental picture remains constructive, the technical picture is deteriorating.

He writes, “There are reasonable prospects for meaningful reform in the telecom and energy sectors, which could help prompt the rating agencies to upgrade Mexico's credit rating. However, it is a crowded trade and an important psychological level was approached (MXN12.0), oil prices are heavy and the US economy is slowing after what appears to be above trend growth in Q1. The risk on the upside for the US dollar extends toward MXN12.40. Such a correction in the dollar, may provide investors a new opportunity to buy what we still believe is a fundamentally under-valued currency.”