Outlook
MXN remains in a cautious, range-bound stance near current levels as domestic policy and trade dynamics unfold. The Citi survey pointing to 1.3% GDP growth in 2026 and a peso around 19 per USD by year-end suggests a softer peso on cycle expectations. Banxico’s 7.25% rate hold supports near-term stability, while tariff measures on non-FTA imports and a tourism-led infrastructure push provide mixed signals for the year ahead. Overall, MXN direction will hinge on policy pacing, trade policy evolution, and the pace of domestic growth versus global dollar strength.
Key drivers
- Citi survey: Mexico GDP seen at 1.3% in 2026 with the peso weakening toward about 19 MXN per USD by year-end.
- Banxico policy: Benchmark rate kept at 7.25%, signaling a pause in the rate-cutting cycle.
- Trade policy: Effective January 1, 2026 tariffs up to 50% on imports from China and other non-FTA countries, impacting over 1,400 product categories.
- Tourism and infrastructure: Nearly 6 million extra visitors expected in June–July 2026, with related upgrades to accommodate growth.
- Recent price action: MXN to USD at 0.057545 (about 4.1% above its 3-month average of 0.055258), within a 3-month range of 0.053496–0.057638; MXN to EUR 0.048557 (2.4% above 3-month average 0.047405), range 0.046468–0.048915; MXN to GBP 0.042123 (7-day low, ~1.7% above 3-month average 0.041455), range 0.040764–0.042584; MXN to JPY 8.9282 (3.6% above 3-month average 8.6186), range 8.2185–9.0702.
Range
MXN/USD: 0.053496–0.057638; current 0.057545; 3-month avg 0.055258.
MXN/EUR: 0.046468–0.048915; current 0.048557; 3-month avg 0.047405.
MXN/GBP: 0.040764–0.042584; current 0.042123; 3-month avg 0.041455.
MXN/JPY: 8.2185–9.0702; current 8.9282; 3-month avg 8.6186.
What could change it
- Policy shift at Banxico (unexpected rate cut or hike) altering the near-term trajectory.
- Major changes in trade policy (tariffs eased or expanded) affecting import costs and export competitiveness.
- Surprises in domestic growth or inflation data altering the policy and growth outlook.
- A stronger or weaker tourism cycle or faster-than-expected infrastructure progress impacting receipts.
- Shifts in global risk sentiment or U.S. dollar strength driving risk appetite and capital flows.
