Short USD/MXN @ 12.93
Capital Ratio: 12.62
I continue my bullish stance on the peso despite a slight pullback into the 13.04-13.1 region. I increased my position by 25 percent last Thursday at 13.05. Sandy, and nervousness over the jobs numbers and elections coming up have been weighing on risk sentiment. If anything, the internal fundamentals in Mexico have strengthened, with Mexico registering an above 4 percent YoY GDP growth rate for Q3, and a hawkish policy statement coming out of the Banco de México. I will be watching the ADP and BLS jobs numbers closely, and may take profits if good news causes a euphoric pop in risk appetite. That said, the peso's excellent yield, and along with my strong capital position make sitting tight an attractive option as well.
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