The Mexican peso is not overvalued says currency traders

Valutahandlare säger att den mexikanska peson inte är övervärderad, vilket gör att valutan är redo att testa om den kan ta sig förbi årets topp då den överraskande motståndskraften i den amerikanska ekonomin lindrar oron för en lågkonjunktur.

Currency traders say the Mexican peso is not overvalued, leaving the currency ready to test whether it can get past this year’s peak as the surprising resilience of the US economy eases concerns about a recession.

The peso strengthened as much as 0.8 percent to 16.7037 euros. Mexican peso per dollar on Thursday, initially leading gains among major currencies, as surprisingly strong U.S. economic growth figures added to optimism fueled by Fed Chair Jerome Powell’s comment on Wednesday that his staff had abandoned its forecast for a U.S. recession. The currency later shed those gains to be little changed after failing to break below the 16.70 level amid a broad upward move in the US dollar, which was fueled by a jump in Treasury yields.

Mexico has overtaken China to become the US’s second largest trading partner behind Canada and a recession north of the border has been one of the biggest risks that analysts have warned could derail the currency’s rise, which has been called “relentless” and dubbed the “super peso”.

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