After having seen levels of 1018 at the beginning of the year, as the months went by we approached the 915 zone, in a movement mainly explained by copper above 5 dollars per pound (a level that is a dream for us) and a depreciation of the dollar in the world. With the first quarter ended, we closed at 950, which, although it is a rise of 35 pesos with respect to the lows, we are still far from the aforementioned highs.

With a Trump administration that has, to say the least, rocked the world with its trade tariffs - which have even targeted its traditional partners - it is not uncommon to explain the recent rise. Now, it is important to consider that while there are clear leaderships in the world, the effects of pushing everyone at once should not be underestimated. This could lead to the isolation of the U.S., which would mean living in a completely different world from that of those of us who grew up with the U.S. as the post-Cold War champion of the free world.

At the moment, and at the local level, it is clear that the levels of comparables are not compatible with higher levels. By this we refer to the value of copper and a Euro that trades at 1.08, after having seen levels of 1.02 at the beginning of the year.

Statements such as the above do not mean that one should take a short position in USD, but rather that, in the event of a significant move, the fall would be more pronounced than an eventual rise.

As a reference, technical analysis shows that the 955 zone is a relevant resistance, whose breakout indicates a move to 970, a key level to consider in the event that tariffs escalate. If we see consolidation above these levels, the commercial reality of the world will probably be different.

If you ask me, I believe that what we have seen in recent sessions is part of negotiation strategies, which, although they can go wrong, the stakes are high, so it would not be unusual to see agreements that end the current nervousness, with common sense prevailing. The experience of President Trump's first term proves this. This is not a certainty, but one must always work on the basis of hoping for the best, but preparing for the worst.

Gustavo Gallardo, CMT
Fynsa Money Desk Trading Manager