Outlook
The peso remains supported by a steady yield differential and resilient nearshoring-driven investment, with a constructive tone as long as risk appetite holds and oil remains firm. However, annual revisions to the USMCA could introduce policy uncertainty that caps upside unless energy-sector impacts are clarified, and global risk sentiment or a shift in oil prices could weigh on MXN moves.
Key drivers
- USMCA continuity with annual reviews: Bank of America projects continuation but with yearly reviews and potential substantial changes, adding policy uncertainty for some sectors (notably energy).
- Yield differential: Banxico holding at 7% sustains a favorable yield gap for peso-denominated assets, supporting non-resident demand.
- Nearshoring and investments: U.S. companies shifting production to Mexico bolster the peso; notable investments include Heineken’s $2.75 billion brewery in Yucatán and Unilever’s $1.5 billion expansion (2026–2028).
- Oil prices and commodities: Mexico’s status as a major oil exporter means higher oil prices help fiscal and trade accounts, providing additional peso support.
Range
MXN to USD: 7-day lows near 0.057226, range 0.053496–0.058279, 3-month average 0.055454 (about +3.2%).
MXN to EUR: 0.048300, range 0.046468–0.048915, 3-month average 0.047498 (about +1.7%).
MXN to GBP: 0.041813, range 0.040952–0.042584, 3-month average 0.041509 (about +0.7%).
MXN to JPY: 8.8557, range 8.2185–9.0702, 3-month average 8.6491 (about +2.4%).
What could change it
- Renewed or accelerated USMCA revisions: Markets would price in greater uncertainty for Mexico’s trade and energy sector.
- Banxico policy shifts: Any unexpected change in the rate path or inflation trajectory could alter yield appeal.
- Oil price volatility: Sustained higher oil supports the peso; a sharp decline could weaken it.
- Global risk sentiment and USD strength: A stronger dollar or higher risk-off flows could pressure MXN, offsetting domestic support.
