Mexican peso bets in Chicago spin 10 weeks in favor of the currency


Local currency speculators on the CME also record three weeks accelerating positions on currency appreciation

Speculators of the Mexican peso on the Chicago Mercantile Exchange linked 10 weeks betting in favor of the local currency, the data also represented the third figure with acceleration, marking new post-pandemic highs.

Mexico City — Speculators of the Mexican peso once again accelerated the bets in favor of the appreciation of the currency on the Chicago Stock Exchange.

The speculative net positions of the Mexican peso in the Chicago Mercantile Exchange (CME) increased 5.14% or 3,603 net long non-commercial contracts with respect to the previous week to total 73,635 net long non-commercial contracts, each for MXN$500,000, of according to data from Bloomberg.

With the previous data, the bets of the Mexican peso in Chicago linked 10 weeks in favor of the local currency, the third with acceleration and marking new post-pandemic highs, given the expectation that the currency will continue to appreciate given the attractive carry trade that it presents in comparison with their peers in emerging countries.

The data corresponds to the week between May 10 and 16, where the main catalysts were waiting for the Bank of Mexico’s monetary policy announcement and waiting for negotiations on the US debt ceiling.

Net non-commercial contracts that include futures and options also increased 3,616 net long cotracts, or 5.16%, from the previous data.

The Mexican peso is the strongest currency compared to its peers in emerging countries with an appreciation of 9.79% so far this year.

In the aforementioned period, the Mexican peso accumulated a slight appreciation of 0.20%, going from MXN$17.5504 to MXN$17.5018 per dollar; while the dollar index strengthened 1.12% due to greater risk aversion that increased throughout this week that ends due to the negotiations between the US president, Joe Biden, and the representative of the Republicans, Kevin McCarthy.

BBVA analysts estimate that, in the short term, the Mexican peso will reach MXN$17 per dollar; while towards the end of the year, the currency is projected to depreciate 4.18% from the intraday levels of MXN$17.75 per dollar on May 19.

Source: Bloomberg