The USD to MXN exchange rate currently shows a bearish bias as the dollar is under pressure, trading at 17.98, which is below its recent average.
Key drivers include the Federal Reserve's anticipation of rate cuts, leading to a generally weaker dollar. The improving global economy and rising commodities also contribute positively for the peso. Additionally, analysts expect a relatively stable framework for the Mexican economy, classified by a stable exchange rate over recent years.
In terms of a near-term range, the USD/MXN is likely to fluctuate within a tight boundary, reflecting the current trends and pressures, with minor deviations expected.
An upside risk comes from stronger-than-expected U.S. economic data that could challenge the bearish outlook on the dollar. Conversely, a downside risk includes a slowdown in Mexico’s economic recovery or diverging monetary policies between the Fed and Banxico that could weaken the peso.
