MXN: Moderate Appreciation Beyond The Sell-Off

We believe that the bounce is over for the Mexican peso in the short term and forecast that it will end the year around current levels, though for now a slump back to MXN14.00/US$ is looking likely as volatility continues on the back of market concerns over a possible eurozone crisis. After the peso's rally in recent weeks, the technical picture has also once again turned somewhat bearish, with momentum indicators on the weekly chart showing the RSI turning up while the MACD heads higher.

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