Outlook
The Mexican peso is expected to stay broadly stable in 2026, with a likely range around 18–20 pesos per U.S. dollar helped by solid Mexican growth, Banxico’s inflation-control stance, and a relatively contained U.S. rate path. If U.S. policy remains in line with expectations and trade conditions stay constructive, the peso could drift within a narrow band. Signals that deviate from these assumptions—such as sharper U.S. rate cuts, stronger-to-weaker Mexican growth, or renewed tariff tensions—could push the pair toward the upper or lower end of the range.
Key drivers
- Stable exchange-rate outlook: 2026 forecast suggests the peso holds within a narrow band, supported by Mexico’s economic performance, Banxico’s anti-inflationary policies, and U.S. rate decisions.
- Interest rate differentials: Banxico cut its policy rate by 150 basis points (1.50 percentage points) to 7.50% by September 2025, a easing cycle that contrasts with the U.S. Federal Reserve’s rate path and affects foreign-investor demand for Mexican assets.
- Trade relations and tariffs: U.S. tariffs on Mexican imports—especially autos—have created uncertainty; Mexico has sought to delay tariff implementations to mitigate potential peso impact.
- Nearshoring and foreign investment: The trend of moving production closer to the U.S. has boosted manufacturing-related FDI in Mexico, supporting peso demand for Mexican assets.
Range
MXN/USD: 14-day lows near 0.057063; 3-month average 0.055691; range 0.054040–0.058279; 2.5% above its 3-month average.
MXN/EUR: 0.048446; 3-month average 0.047632; range 0.046825–0.049108; 1.7% above its 3-month average.
MXN/GBP: 0.042193; 3-month average 0.041587; range 0.040994–0.042584; 1.5% above its 3-month average.
MXN/JPY: 8.9430; 3-month average 8.6954; range 8.3131–9.0702; 2.8% above its 3-month average; volatility around 9.1%.
What could change it
- A material shift in U.S. monetary policy or growth that alters dollar strength or capital flows into Mexico.
- Mexico’s growth and inflation performance or unexpected Banxico guidance that alters the trajectory of the policy rate.
- Actual tariff actions or their suspension/withdrawal affecting trade uncertainty.
- The scale and pace of nearshoring-related investment beyond current projections.
- Changes in global risk sentiment or EM currency flows that tighten or loosen financial conditions.
