Nafta Talks Are No Problem for Mexico's Peso (For Now)
- Implied volatility in the currency nears a two-year low
- Markets are pricing in a middle ground in trade negotiations
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As Mexico City prepares to host the second round of talks to renegotiate the North American Free Trade Agreement, currency traders seem to possess a surprising degree of calm.
Three-month implied volatility for the peso -- a measure of its expected swings against the dollar over the next 90 days -- has fallen to near the lowest level in two years. In other words, investors are looking pretty relaxed over any fallout from the talks.