Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Mexican Peso Forecast Outlook

Mexican Peso

Hedge Fund Bulls Breathe New Life Into World's Hottest Currency By Bloomberg

Leveraged investors go long peso for first time in 11 months.

Mexico's peso surged 11% to lead global gains in first quarter.

The world's best currency rally this year is finding fresh support from hedge funds.

Leveraged investors turned net bullish on Mexico's peso for the first time since Donald Trump all but locked up his bid to become the Republican party's nominee in May, according to the latest data from the U.S. Commodity Futures Trading Commission. It's a turnaround from when bearish positions reached a record in October amid speculation Trump's pledges to support U.S. manufacturing would be a disaster for Mexico's export-dependent economy.

Investors have made the peso the world's best performer this year, sending it up 11 percent against the dollar, after it plunged to record lows in the aftermath of Trump's victory. The rally was driven by the idea that the selloff had been too sharp given the lack of clarity about Trump's exact trade policies as well as friendly comments from U.S. officials. Citigroup Inc. strategist Dirk Willer had said in a note last month that the currency would probably underperform in coming months without fresh inflows from hedge funds.

"The Trump agenda is no longer as frightening as it once was," said David Tawil, co-founder of Maglan Capital in New York.

Mexican Peso Chart

Tawil says that the administration will probably be tied up defending itself from allegations that it was complicit with Russian interference in the 2016 election and is less likely to focus on measures that would sharply curtail Mexican exports to the U.S.

"It is becoming even more likely that the administration will have to spend time and resources on explaining and defending that episode, further diminishing its political capital necessary for reforming the relationship with Mexico and Nafta," said Tawil, who added that his firm was making a bet on Mexican equities.

Hedge funds were net long 8,361 contracts in the week ended March 28, according to the CFTC data. That compared with a bearish position of almost 100,000 contracts in October.

Off to its best start to a year since a re-denomination in 1993, the peso has ended a streak of 10 consecutive quarters of losses, while its 1-month volatility nears an eight-month low. Mexico's top diplomat Luis Videgaray told Bloomberg last month that an updated version of the North American Free Trade Agreement could include a mechanism to ensure the currency's stability.

Successful Forex Trading

Interview with a Forex Super-Trader

Investor Trader Goal Setting Habits

Goal Setting for Traders and Investors

Super Trader Program

Dr. Van Tharp Super Trader Program

Van Tharp Institute
Van Tharp Institute

Dr. Van Tharp Trading Education Institute
Investing Trading Home Study Programs & Live Seminars Workshops

Track n Trade Live Forex

Track 'n Trade Live Forex Futures & AutoPilot Trading Free Webinars

Track n Trade Live Forex

TracknTrade Forex Bulls Bears Signals

AvaTrade

Award Winning Forex Broker AvaTrade
Trade Currencies Commodities Indices Equities and Bitcoin

Special Report

Special Report on Profiting from Different Forex Market Types and Conditions

Click the Links Below to Review Forex Trading Systems Education Courses Signals and FX Brokers

Forex Education Courses

Steve Nison

CandleCharts Academy Free Training

Steve Nison

Steve Nison's Candle Charting Essentials Training Courses for Stocks Options Forex and Trading Software

Peak Performance

Dr. Van Tharp Peak Performance Home Study Program

How To Trade Forex with the Elliott Wave Model

How To Trade Forex Using Elliott Wave Trading Method

Forex Trading Systems

Stocks Futures Forex Forecasts

Elliott Wave Pro Services
Currencies Stocks Commodities Precious Metals Energy

MTPredictor Professional Trading Software

MTPredictor - Free Demo
Elliott Wave and Fibonacci Trading Software