2018: Sell CAD vs. MXN

We said:

We sell CAD/MXN on relative competitiveness. Mexico is cheap, Canada isn't. We continue to expect Canada to be the laggard in any global upswing because of the currency's strength. Recent weakness in the oil price will also dampen trade flows. BoC may raise rates more than 3 times but if it does, it will probably be because the Fed has delivered more than the two hikes the market is currently discounting, rather than because Canada needs the most policy tightening in G10. CAD is likely to underperform as rate-hike pricing adjusts.

MXN FX is cheap. Leftist presidential candidate AMLO has a lead of at least 9% in the polls, but with fully six months until the election it is too soon to price in all the 'bad news'. As NAFTA renegotiations continue there remains a risk that the trade treaty will be scrapped. But that is not our base case, and we reckon the current spot level compensates for that risk. 

We sell CAD/MXN at 15.50 with a stop loss at 15.80 and a take profit target of 14.85. 

Outcome:

CAD/MXN hits our profit taking level on 12 February 2018 for a total profit of 4.2%. 

Economics

02 Feb 2005
01 Sep 2004
12 Aug 2004
05 May 2004
20 Jul 2000
01 Apr 1999
06 Jan 1999
01 Sep 1997
06 Jun 1995
10 Feb 1994
10 Mar 1993
06 Feb 1992
10 Dec 1991
03 Jan 1990

Politics

Markets

15 Apr 2016
16 Oct 2015
25 Nov 2013
20 Dec 2012
20 May 2004
03 Jul 2001
VIDEO

Video

View our summary videos on fast trending topics. To listen to a recording of our Conference Calls, please get in touch with zdl@tslombard.com

READ MORE
TRACK RECORD

Track Record

We have a 29 year track record of successful calls. Many of these calls combined economic, political and market analysis.

READ MORE
PRESS

Press

To request an interview with a member of our team, please get in touch zdl@tslombard.com .

READ MORE

Menu

Client Login


Don't have an account? CREATE YOUR ACCOUNT
READ MEET TALK