No change in our peso/dollar outlook

Genevieve Signoret & Patrick Signoret

Currencies

  • In the four weeks to July 28, the USD/MXN moved inside $1.00=12.94–13.02. We forecast 13.00 for December 2014 but also, some time before then, a volatility episode. The peso in this scenario hits 13.30, then bounces.
  • We think the EUR/USD has overreacted and will stabilize soon at around €1.00=1.35. But risks are tilted toward a weaker euro. Also, if volatility breaks out, the euro could touch 1.32 before rebounding.
In the 4 weeks to July 28, the USD/MXN moved inside 12.94–13.02. We forecast 13.00 for Dec 2014 but also, some time before then, a volatility episode. The peso in this scenario hits 13.30, then bounces.
LCNC1
 
We think the EUR/USD has overreacted and will stabilize soon at around 1.35. But risks are tilted toward a weaker euro. Also, if volatility breaks out, the euro could touch 13.32 before rebounding. 
LCNC2
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