The market for the AUD to MXN exchange rate is currently range-bound. Key drivers for this stability include the interest rate differential, as the Reserve Bank of Australia is expected to raise rates to combat rising inflation, which is influencing the AUD positively. Meanwhile, Mexican economic stability is supported by forecasts indicating a steady trading range for the peso against the dollar, which keeps the MXN steady.
In the near term, analysts suggest the AUD/USD exchange rate will remain within a limited range, reflecting its 3-month average around current levels.
An upside risk for the AUD might be a stronger than expected economic recovery in Australia, prompting more aggressive interest rate hikes. Conversely, a downside risk could come from a slowdown in global demand for commodities, adversely impacting the AUD and leading to greater depreciation against the MXN.