BRL, MXN Attractive Short-Term

The volatile climate across global financial markets has made it increasingly difficult to gauge short-term moves of late, but our call for a bounce in selective EM FX appears to be playing out nicely (see 'BRL, MXN, TRY Bounce', October 28 and 'FX: Short-Term Upside On The Cards', October 27 for further insight). Since promoting the view earlier this week, we have seen respective gains of 8.5% and 4.0% in the Brazilian real and Mexican peso, and we still see attractive upside potential against the dollar for both Latin currencies, at least in the short run.

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