Mexican peso to rise
By Vincent-Frédéric Mivelaz
Mexico’s new President, Andres Manuel Lopez Obrador (AMLO), has restarted talks with the USA on the North American Free Trade Agreement. US and Mexican officials have particularly covered how much North American content should be included in cars. According to both Jesus Seade (negotiator of AMLO) and Ildefonso Guajardo (current Economy Minister), negotiation are making good progress. Completion is expected by the end of the month or mid-September latest. A second phase of discussions will focus on agriculture.
By completion of this “bilateral” talk phase between the US and Mexico, we expect the Mexican peso to appreciate further against the greenback and approach the 18.45 range. For now, USD/MXN is trading at 18.96.
Dollar slides in risk off
By Peter Rosenstreich
What a difference a summer week makes! From doom and gloom to yesterday’s S&P 500 intraday all time high. USD continues to slide: President Trump is trying to talk down an interest rate hike, US-China trade talk are progressing and the dollar is overbought anyway. Treasuries slipped on Trump’s interest-rate talk; oil prices firmed on as news of high summer demand.
Today’s news will be the minutes of the Federal Reserve’s last monetary policy meeting. We think members will be satisfied with conditions matching their June forecast. Trump will not be happy: markets should expect his anti-rate-hike talk to increase.