USD/MXN headed toward another record close near 21.00; up 10% for the week

The Mexican peso was the worst performer in the currency market during the week. It was outperforming before the unexpected victory of Donald Trump in the US elections, but then it reversed sharply and collapsed. 

The decline was dramatic enough that now analysts see as possible a rate hike of 200 basis points next Thursday, when the Bank of Mexico meets. 

USD/MXN reached today a new all-time high at 21.38 before pulling back toward. The retreated form the highs found support around 20.60 and the pair was about to end the week  hovering around 20.70, up 10% for the week. Since the election night, it gained 13%. 

BRL, another victim of Trump’s victory 

The second-worst performer since Wednesday was the Brazilian real. The US dollar reached the highest level since June in Brazil amid fears about the impact of Trump’s polities. 

USD/BRL was trading around 3.17 before the election and then turned sharply to the upside. On Thursday broke the 3.30 area and today it reached 3.49, before falling back toward 3.40 where is about to end the week. Since US election it was risen 7%.  

The decline of the real (worst week in a year) forced the central bank, to make changes to its currency swaps auctions. The central bank started last month an easing cycle by lowering the Selic rate from 14.25% to 14.00%.