For weeks, it was practically impossible finding a speculator who had open short positions of MXN; this is a sentiment condition that suggests to stay away from the Mexican Peso from a different point of view.
At the end of September we had reported how the hedge net long exposure combined with its weight on the open interest signaled a clear signal to buy on USD / MXN.
Once again, this insight has enabled us to liquidate USD / MXN at significantly lower levels (12.80) than the current ones.
At the moment, the market is trying to force upward the 12 months average of 13.25, an effort that will hardly go through on the first try, but that will certainly be repeated in the next weeks.
The best time to go short of USD / MXN is in fact when the exposure of Mxn by the hedge is net short but, considering that we are on the highs of net long, we believe that this moment is still a long way to come (chart source: Bloomberg).