The Mexican Peso rips lower in a volatile sell-off after markets switch risk averse on geopolitical tensions.
Israel purportedly retaliates against Iran, with explosions heard in the Iranian city of Isfahan.
USD/MXN surges to just below 18.00 on the news but then retreats and settles in the 17.30s.
The Mexican Peso (MXN) is trading in the 17.30s on Friday after an extremely volatile 24 hours in which the currency depreciated by over five percentage points in some pairs as a result of a mass exodus to safety.
The Mexican Peso was roiled by news reports of an Israeli attack on Iran in retaliation for the April 13 drone attacks by Iran against Israel. According to Reuters, explosions were heard in the Iranian city of Isfahan where a military base is located.
Markets reacted in an extreme way with investors piling into safe-haven assets such as Gold, the Japanese Yen (JPY), the Swiss Franc (CHF) and the US Dollar (USD). At the other end of the spectrum, currencies perceived as “risky” such as the Mexican Peso and the South African Rand got hammered.
This caused the sudden whipsaw in the Mexican Peso’s pairs, as investors in their droves dropped the currency like a hot taco.
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