High US interest rates are proving a headwind to emerging currencies worldwide – even to the mighty Mexican Peso. In addition, the Peso this month is facing the unwind of Banxico's FX intervention book – a front-loaded exercise that we felt could weigh on the MXN this month and perhaps into October, too.

With the Dollar set to stay strong for the next few weeks, USD/MXN could head up to the 200-Day Moving Average at 17.85 or even briefly trade above 18. However, we like the Peso multi-quarter and expect good Peso buying interest should USD/MXN trade over 18.