Currencies
Leveraged Funds Help Push Mexican Peso Back to Top Currency Spot
- Group bought pesos for the first time in five weeks: CFTC data
- Fading global volatility boosted currency’s carry trade appeal
A recent decline in global volatility helped push the peso’s volatility back below 10%, improving its risk-reward ratio.
Photographer: Mauricio Palos/BloombergThis article is for subscribers only.
Leveraged funds have been the main force behind the recent Mexican peso rally, propelling it to again become the best performing currency in the world this year.
The group, which is composed mostly of hedge funds, increased its net long peso positions by 3,780 contracts between May 7 and May 14, according to the latest available derivatives data from the Commodity Futures Trading Commission. It was the first bullish week for the group in more than a month, which helped the peso to strengthen toward its year-to-date high at 16.2616 per dollar.