Cross-market volatility is picking up sharply which will continue to prompt an unwind of carry trade strategies. Here, the carry trade's former darling – the Mexican Peso – is getting hit hard.

USD/MXN looks as though it could correct to the 18.50/18.70 area before the dust settles.

An unwind of the carry trade will provide some natural support to the Japanese Yen and continue to provide headwinds to other popular high-yield currencies in Latam (Brazil and Colombia), Europe (Hungary) and Asia (Indonesia).