Economists at Credit Suisse have lowered their USD/MXN target range from 21.70-23.00 to 20.85-22.50. Ahead of US elections, they see data surprise risks and asymmetry in US polls as limiting the scope for a sustained break below 21.00 while would look to fade spikes to 22.50.
Key quotes
“In the light of recent price action, and in acknowledgment that realized volatility in MXN will remain likely considerable going into US elections, we look to shift and widen our target range for USD/MXN, lowering both the upper end and the lower end of the range respectively from 23.00 to 22.50 and from 21.70 to 20.85 (near the August 2020 lows and also the former high from Jun 2018).”
“As for the pre-election period more specifically, we suspect however that attempts to break below 21.00 might find resistance.”
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