The EUR to MXN exchange rate has recently reflected a blend of geopolitical and economic factors influencing both currencies. As of now, the euro is trading at approximately 21.60 MXN, marking a 1.1% decline from its three-month average of 21.84 MXN. Analysts note that this decline is attributed in part to a downgrade of France's credit rating by Fitch, which has exerted downward pressure on the euro. The influence of the stronger US dollar also plays a critical role in shaping the euro's trajectory, as traditional inverse correlations often dictate movement between these currencies.
Recent developments in the Eurozone, including the approval of Bulgaria to join the eurozone in 2026, are poised to impact the euro's long-term outlook positively. Nevertheless, the European Central Bank (ECB) has maintained a cautious stance towards interest rate adjustments, with officials expressing concerns that the euro's rapid rise against the dollar—up 14% so far this year—could undermine export competitiveness. As inflationary pressures persist, stronger monetary policy will be vital for maintaining the euro's stability in the coming months.
On the Mexican peso side, it remains supported by relatively high interest rates from Banxico, drawing in investors seeking higher returns. However, recent volatility has emerged due to the termination of a temporary US tariff hike freeze, which could exert downward pressure on the peso over the next year amidst signs of economic weakness in Mexico. Political stability has been somewhat compromised with Claudia Sheinbaum's election, raising market speculation about potential reforms that could affect investor confidence.
Crucially, the link between oil prices and currency values remains significant, particularly for the euro. With oil prices recently trading at $67.44 per barrel—1.9% below the three-month average—this volatility could further influence both the euro and the Mexican peso given the interconnected nature of energy prices and economic growth. Looking ahead, forex analysts suggest observing the geopolitical landscape and commodity price movements closely, as these will be pivotal for the respective performances of the euro and the peso in the coming months.
