Investors Set Sights on Futures and Options for Managing Risks in Mexican Economy Amid Increased Volatility”.


Currency Risks and High Rates are the Main Focus of Hedging Contracts

In 2024, investors looking to manage their risks will rely heavily on exchange rate and interest rate futures or options, according to José Miguel de Dios, the general director of the Mexican Derivatives Market (MexDer). As volatility in the financial market increases due to elections and central bank reference rate decreases, it is likely that high fluctuations in assets will occur.

While Mexican peso futures contracts on the Chicago Mercantile Exchange (CME) Group reached a record average daily volume of $1.8 billion in 2023, Paul Houston, global head of foreign exchange products at CME Group, predicts that continued growth in the Mexican economy and favorable interest rates will continue to attract more clients to trade currency futures at CME Group. Bernardo Gattass, head of volatility trading at Itaú, believes that many large institutional investors should consider adding CME Group as a price provider for Latin American currencies in order to take advantage of both global and local liquidity.

Despite recent gains against the US currency, with a gain of 13% in 2023 and closing at 16.96 units per dollar spot, Mexico’s peso remains vulnerable to fluctuations in the financial market. As such, it is important for investors to carefully monitor exchange rates and interest rates and consider using futures or options to manage their risks.

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