The MXN rallied to below 18.00 against the USD after Oil prices took off following the production cut by OPEC. But economists at Société Générale note that seasonals do not favour the Peso in April.

Downside risk for MXN if US yields march higher after ISM and payrolls

“The question from here is whether the Peso can strengthen towards the levels close to 17.45 of 2017. Seasonals do not tend to favour a stronger MXN in April.”

“The MXN is up 8% in Q1 and leapfrogged the CLP as best performing currency this year. Speculative investors trimmed long positions though for a second straight week, but the long base remains elevated in historical terms at 21%. This poses downside risk if US yields march higher after ISM and payrolls.”