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Thursday, May 24, 2012

The Mexican peso has gone to a $14.05 exchange rate, from $11.50
The Australian is now $0.97 from the $1.10 to $1.09 Area.
I like Selling USD (US dollars), and..
1) Selling USD & Buying Pesos @$14.05, then investing in Mexican CETES @ 4.42% for 3 months or 4.63% for 1 year.
2) Selling USD & Buying AUD @$0.97, then investing in Australian Treasuries @ 2.72% for for 1 year.
This examples are for educational purposes only, and are not intended in any way to be trade recomendations to buy or sell any security.
ATTACHED is the MXN Cete interest rates...
Cetes “Good Luck Trading”

Friday, March 20, 2009

Esta es la opinion de un Analista de Monedas de USA:

By Marc Chandler
Mexico to Cut Rates: Peso is a Sell
3/20/2009 7:54 AM EDT

Mexico's central bank is widely expected to cut its overnight rate by 25 bp today. That would bring it to 7.25%. Last month it delivered a 25 bp rate cut too. The market had expected a 50 bp cut and punished the peso in disappointment.

However, the peso has strengthened sharply in recent days-up until yesterday--and this has renewed some speculation of a 50 bp move today. This seems unlikely.

Consumer inflation remains stubborn. It was 6.2% in Feb, having peaked at 6.53% at the end of last year. Mexico's economy is contracting. Domestic demand is weak and of course foreign demand (primarily the US) is poor.

The main sources of capital inflows into Mexico--exports, worker remittances and tourism are drying up. Oil prices are roughly a third of where they were 9 months ago.

Mexico has spent some $20 bln to slow the peso's descent or roughly 5% of its reserves. Central Banker Ortiz is unlikely to risk the new found stability in the currency may cutting rates more aggressively. Given the pass through of a weaker peso on imported inflation and then domestic inflation, means that policy makers think that the stability of the peso is the key to capping inflation.

Mark Twain once said that history doesn't repeat itself but that sometimes it rhymes. In this context, it would suggest that the peso may not sell-off on a 25 bp rate cut like last month.

On the other hand, K Marx said that history repeats itself--the first time as tragedy the second time as farce. That would suggest that the peso might in fact sell-off again.

Technicals are more aligned with the latter scenario. Hourly technical indicators suggest the overnight recovery in the peso has left it over-extended.

Look for the dollar to bounce back from a test on MXN14.10