The recent volatility in the Mexican peso is now being reflected in the leveraged fund community, positioning was reduced aggressively to leave the net long a little over 26K contracts
Mexican peso net long positioning has not seen a sharp drop like this since the March banking crisis, reductions of this magnitude compare to the Covid crisis (chart below)
Hedge funds' adjustment came as we headed into the Banxico June meeting and the U.S. Presidential debate. While carry/vol ratio is now at more attractive levels relative to the beginning of the month, it is important to start looking at realized vol into the end of the week
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