- Near the end of the week, USD/MXN spikes to 25.28, fresh two-week highs.
- A negative economic outlook, risk aversion and the slide of the Brazilian real weigh on MXN.
The USD/MXN jumped to 25.28, the highest level since April 6, the day it hit the intraday record high at 25.76. On Friday, after the new peak pulled back and it was about to end the week hovering around 25.00, up more than 5% from the level it had a week ago.
The Brazilian real tumbled on Friday, weakened by the resignation of Justice Minister Moro. The USD/BRL was already trading at a record high,, but it climbed further to 5.75. A week ago was trading at 5.20.
Political tensions in Brazil and the negative economic outlook for Latin America has been negative for their currencies. Across all the region, the dollar stands near or at record highs; Mexico is not the exception.
A close of USD/MXN around current level would be the second above 25.00 and could sign further gains ahead. The pair has risen in seven out the last eight trading days and is offering no indications of a correction so far. Next week, volatility will likely be elevated in MXN.
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