The Canadian dollar (CAD) remains steady against the Mexican peso (MXN), trading at 13.06, just 0.7% below its three-month average of 13.15. Analysts observe a stable range of 2.5%, with CAD-MXN fluctuating between 13.04 and 13.36 in recent weeks. CAD has been influenced by external factors, particularly the recent drop in oil prices, which are currently near 90-day lows at approximately 58.83. This price represents an 8.1% decrease from the three-month average of 64.02, indicating potential pressure on the CAD since Canada relies heavily on oil exports.
Despite the backdrop of falling oil prices, the CAD is seeing some support from several domestic developments. Recent reports highlighted that Canada's GDP grew at an annualized rate of 2.6% in Q3, which exceeded forecasts and enhanced investor confidence in the CAD. Moreover, the recent uptick in inflation may provide impetus for the Bank of Canada, which has taken a cautious approach by cutting interest rates to 2.25%. The economic mix creates a scenario where CAD can hold its ground in the face of external shocks from commodity prices.
Conversely, the Mexican peso is expected to trade within its historical range of 16.00 to 22.00 per U.S. dollar in 2026, with a slight depreciation forecasted to 18.92. This outlook is influenced by interest rate cuts from Banxico, which have narrowed the interest rate differential with the U.S., potentially influencing MXN's attractiveness. The ongoing trade tensions, including U.S. tariffs on Mexican exports, add another layer of uncertainty for the peso. However, strong foreign direct investment driven by nearshoring trends may support the MXN.
Overall, the balance of economic indicators and shifting global sentiments suggests that while the CAD might navigate recent oil price volatility, both currencies remain within ranges that reflect their respective economic health. Stakeholders should keep an eye on the interplay of these factors, as they will likely influence short- to medium-term movements in the CAD-MXN exchange rate.
