USD/MXN at fresh high 21.7330 after fresh high 21.6680, the ‘Trump trade’ tackles down any short attempt

Consistency has been the name of the game for the Mexican peso since 2007 when everything started going the other way around to favor its big and bully neighbor. Since that moment, year after year USD/MXN played the cost-effective manufacturing role via a competitive (or slaved exchange rate) currency.

As of writing the pair is up 0.3545, or +1.66%, in a trading day jam-packed with 4 new consecutive new highs. The 21.6220 marked one of them, later on, the 21.6680 handle, 21.7080 is next and out of the blue this party kept going to break 21.7100 (round figure) and hit 21.7330

Mexico Peso at 21; bargain of the year

Kenneth Rapoza, contributor at Forbes, shared constructive views on the Mexican Peso exchange rate future value, “Outside of China, Mexico is the 'most hated' country in Trump's America. Last year, a survey of investors conducted by Barclays forecast the Mexican peso going to 26. It's now at 21. If it goes to 26, buy Cancun, people. Despite all the media noise about Trump versus the Mexicans, the question investors are asking now is when will Mexico be cheap enough not to ignore? So far, it's kind of expensive.

Mexico foreign debt is investment grade. The peso has not yet undermined Mexico's ability to service its foreign debt even as the currency has lost precisely 93.92% of its value against the dollar since January 12, 2007. It's been 10 years of a straight trip down.  Over the last 12 months, the peso has weakened more than the Ukrainian hryvnia, and Ukraine is currently battling the Russians and lost a chunk of real estate to Moscow in March 2014.”

USD/MXN Technical Levels

To the downside, there is little to focus on as the exotic currency seems well-supported at 21.3720; Is there any hope to experience that pullback? Even if Banxico starts the rate hike engine in "aggressive mode" it may not provide any value to the Mexican Peso due to the currency fundamental dynamics. To the upside, the sky is the limit or maybe the moon? From this point, the exchange rate is navigating in strange waters and the most logical target in the short-term is on the 22.00 handle.

MXN: Little room for relief - Rabobank