The exchange rate forecast for the CAD to MXN is shaped by several recent developments in both Canadian and Mexican markets. The Canadian dollar (CAD) has recently benefited from strengthening oil prices, trading currently at about $69.28 per barrel, which is approximately 2.9% above its three-month average. As a commodity-linked currency, the CAD maintains a strong correlation with oil prices, and experts note that continued rises in oil could further support its strength.
Market observers have indicated the CAD recently traded at 13.65 MXN, which is 2% lower than its three-month average of 13.93 MXN, within a stable range of 4.9% from 13.60 to 14.27. The correlation with oil prices is particularly relevant due to Canada's status as a major oil exporter, suggesting that any sustained increases in oil could provide more potential upside for the CAD.
On the other hand, the Mexican peso (MXN) has experienced volatility due to geopolitical and trade tensions, especially in light of the U.S. imposing tariffs on some of its trading partners, including Mexico. As reported, the peso hit turbulence after President Claudia Sheinbaum's announcement of potential retaliatory measures against U.S. tariffs but partially rebounded following negotiations where tariffs were delayed. Markets are hopeful for negotiations to resolve these trade issues, leading to somewhat increased optimism regarding the peso's stability.
Analysts emphasize that the future trajectory of the CAD/MXN exchange rate will largely depend on the interplay between oil prices and geopolitical developments around trade. Continued support for the Canadian dollar hinges on rising oil revenues, while the peso's performance will be dictated by how effectively Mexico navigates the ongoing trade challenges. As such, businesses and individuals engaged in international transactions should closely monitor these factors, as they could substantially impact the CAD to MXN exchange rate moving forward.