The EUR to MXN exchange rate is currently on a downward trend, trading at around 21.16, which is approximately 1.4% lower than its 90-day average of 21.45. Analysts note that the euro has experienced significant fluctuations influenced by geopolitical tensions, particularly regarding the ongoing war in Ukraine. Concerns surrounding renewed conflict in the region have weighed heavily on the euro, as has a forecasted slowdown in German factory orders. This suggests that economic uncertainty within Europe could keep the euro under pressure in the near term.
Forecasts from analysts reflect a complex interplay between domestic factors and external market influences. The European Central Bank (ECB) has maintained a commitment to a market-driven approach to exchange rates, stating that it will not engage in competitive devaluations. Despite recent upsides in inflation, which has ticked up to 2.2% from 2.1%, it remains close to the ECB's target, indicating a steady outlook for interest rates. However, if inflation trends deviate from projections, it could lead to significant market reactions.
On the other side, the Mexican peso (MXN) is affected by its own set of dynamics. A recent Reuters poll indicated that the peso is expected to trade in a stable range of 16.00 to 22.00 per U.S. dollar for 2026, with a slight depreciation forecasted to 18.92. The Bank of Mexico's interest rate cuts may affect the peso's strength, potentially narrowing interest rate differentials that favor the MXN over the EUR. However, external trade issues, particularly tariffs imposed by the U.S. and recent import suspensions, could pose risks to the peso's performance.
Crucially, oil prices—traded at near 14-day highs of 63.75—exhibit their own volatility, which can influence both the euro and the Mexican peso due to their respective economic ties to energy markets. Analysts highlight that a stable or rising oil price could benefit the peso, thus affecting the EUR/MXN exchange rate.
As these elements interact, the potential for further volatility in the EUR/MXN pair remains significant, and currency forecasters suggest that ongoing geopolitical issues and domestic economic performance will be pivotal in shaping the future direction of both currencies.
