HSBC - "For currency markets, we believe USD-MXN is the best way to express a view on the outcome of the US election and the subsequent fiscal debate. Other candidates are deficient for various reasons. The high yielding TRY and BRL are being constrained by local policy, losing their affinity with “risk on-risk off” (RORO). The AUD and NZD retain their allure, in this regard, but lack the direct US economic ties of Mexico. The CAD can lay claim on both fronts, but the currency has been less volatile than the MXN, suggesting that the reaction south, not north, of the border is the one that will deliver excitement. With JPY shackled by the intervention threat, all roads lead to USD-MXN. A Romney victory would favour USD-MXN gains, an Obama win the opposite."
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