The first is the growing tension between China and Western countries due to the fact that Xi Jinping reacted negatively to sanctions against the Russian Federation and clouds are actively gathering around Taiwan as China increases the volume of troops conducting exercises around the island. The second is a zero-tolerance policy for coronavirus infections, which effectively shut down Shanghai for several weeks. These two factors devalued the yuan by 8% in three weeks. Given the fact that the Taiwan issue is gradually becoming a key one for Xi, since the elections in China will be held at the end of this year, and relations with Russia are only getting stronger amid the conflict with the West, as well as the “flag” figure on the daily chart that has actually been completed, by the end of summer, the yuan may return to the lows of May 2020, that is, to 7.1-7.2 per dollar.

Before the start of the pandemic, it managed to overcome this mark, but the coronavirus dropped it to around 17.5 pesos in a month. Moreover, the peso failed to strengthen even in the region of 15 units, and as a result, the trend towards a gradual depreciation of the Mexican currency against the Canadian began to slowly but surely gain momentum. The technical resistance of 16.5 pesos per Canadian dollar could be broken within a couple of weeks, given the growing geopolitical risks and lower oil prices.

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