USD/MXN: Room to rise meaningfully - Rabobank

Analysts at Rabobank forecast USD/MXN at 20.5 in 1 month, 20.0 in sixth months, 19.8 in 9M and at 19.8 in 12M.

Key Quotes: 

“MXN is the second best performing currency so far this year. MXN remains the most attractive carry currency when adjusting for volatility and liquidity and this has provided key support over recent months.”

“We had expected NAFTA negotiations and the upcoming Presidential election on July 1st to weigh on MXN sentiment but low volatility has persisted and NAFTA fatigue appears to have crept in as negotiations continue.”

“We still see room for USD/MXN to rise meaningfully as we head towards the election and the volatility term structure points to concerns over the potential for such a move. Outside of those event risks, however, demand for MXN is likely to remain high.”