USD/MXN remains on the back foot at the lowest levels since December 2015, making rounds to 16.75 while fading the early Monday’s corrective bounce during Tuesday’s Asian session.
That said, the Mexican Peso (MXN) pair dropped in the last seven consecutive days amid broad-based US Dollar weakness, mainly driven by the concerns that the downbeat US inflation clues will prod the US Federal Reserve (Fed) from lifting interest rates past July. Adding strength to the USD/MXN bearish bias are the downbeat options market signals for the pair.
That said, the one-month Risk Reversal (RR) of the USD/MXN pair, a measure of the spread between call and put prices, dropped to -0.015 by the end of Monday’s North American trading session, reversing the late Friday’s corrective bounce.
It should be noted that the options market gauge prints the second consecutive weekly RR with a -0.015 mark at the latest, following the previous weekly figure of -0.287.
In doing so, the options market figures defy the hopes of witnessing a corrective bounce in the USD/MXN price. However, traders should keep their eyes on the US Retail Sales and Industrial Production for June for clear directions.
Also read: USD/MXN defies gravity, rises from 7-year low as global economic uncertainty simmers
