According to analysts at TDS, after yesterday’s resignation of Mexico’s Finance Minister, the momentum is favoring further the Brazilian Real over the Mexican Peso.
Key Quotes:
“We take yesterday’s surprise resignation by Mexico’s Finance Minister, and his replacement by his deputy, to imply an erosion in Mexico’s fiscal orthodoxy that had been best represented by the fiscally responsible 2019 budget.”
“Brazil’s pension reform process is now moving at an accelerated pace (…) Such a reform will open the door to further BCB easing and thus support Brazilian risk assets.”
“We see momentum in sentiment shifting further in favour of BRL and against MXN. Substantial downside MXN risks are rising, particularly given aggressive positioning in the currency.”
Share
