Since the end of June, the Mexican peso has gained almost 10% against the dollar. USD/MXN forecasts change all the time, affected by news events and relative sentiment towards the US and Mexican economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
The peso has remained strong against the US dollar into 2021 with USDMXN consistently below 20.
Since the end of June, the Mexican peso has gained almost 10% against the dollar, the best performance among about 140 currencies tracked by Bloomberg. The peso has also delivered the No.1 carry trade — the gains made by borrowing dollars and buying short-term peso-denominated securities — a reward for investors with the stomach to go in after a precipitous 18% selloff in the first half of 2020.
Standard Chartered and Rabobank say the Mexican peso is poised to extend its rally through the end of the year. With negative interest rates in many developed markets, Mexico’s 4.5% benchmark holds plenty of appeal to carry investors.
The USD experienced a sell-off in early November as investors moved away from the safe haven of the dollar and into riskier assets, off the back of Biden winning the presidential election and the positive news of COVID-19 vaccine testing. November Currency Update
The Mexican peso continued its good run in 2020 hitting the significant value of 20 to the US dollar November 23rd, as the oil price continues to improve and investors look for higher yield investments. The peso fortunes are connected to the oil market with oil high on the list of Mexico’s top exports.
US interest also affect the peso because Mexico holds high levels of dollar-denominated debt, which becomes easier to repay when dollars are cheap and US rates are low.
Cash remittances to South America have defied predictions of a large Covid related drop. The World Bank's prediction in April was dire; Cash transfers from immigrants in the U.S. to family in Latin America would plummet 19% due to the pandemic. However with remittances surging, the level of money being sent is roughly equal with 2019.
USDMXN at 19.55 is 3.1% below its 90-DAY average, range 19.55-21.38.
🔔 USDMXN is DOWN 0.6% TODAY and at 90-DAY LOWS.
Alerts:1-DAY▼0.6% | 90-DAY LOWS |
The foreign exchange market convention for USD/MXN is to quote Mexican peso as Peso per US dollar. Thus a higher USD/MXN rate actually means one peso is worth less, that is you can buy more peso for 1 USD.
Whether the peso will rise or drop in the future against the US dollar is a difficult and the answer really depends on many factors. The best way to consider the current USD-MXN relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
13 Jan 2021
21 Dec 2020
22 Oct 2020
21 Jan 2020
22 Jan 2016
23 Jan 2011
USD/MXN 10 year historic rates & change to 20-Jan-2021 : 19.6043
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