Outlook
The peso is expected to stay broadly stable in 2026, trading roughly between 18 and 20 pesos per USD as Mexico’s economy performs, Banxico maintains anti-inflation discipline, and nearshoring supports investment flows. The backdrop remains supportive, but the path will hinge on U.S. policy decisions and trade developments.
Key drivers
- Stable rate differential and carry appeal: Banxico’s easing path has been more gradual than the Fed’s, supporting a steady peso while inflation is kept in check.
- Tariffs and trade talks: U.S. duties on Mexican autos have created uncertainty; Mexico is seeking to delay implementations to mitigate near-term peso volatility.
- Nearshoring and investment: Strong inflows into Mexico’s manufacturing sector bolster demand for Mexican assets and help underpin the peso.
- Macro momentum and inflation: Mexico’s growth trajectory and inflation outlook influence Banxico’s policy stance and capital flows.
Range
MXN/USD is at 90-day highs near 0.058279, about 4.0% above its 3-month average of 0.05603, having traded in a relatively stable 7.8% range from 0.054040 to 0.058279.
MXN/EUR is at 90-day highs near 0.049108, about 2.7% above its 3-month average of 0.047816, trading in a stable 4.9% range from 0.046825 to 0.049108.
MXN/GBP at 0.042678 is 2.3% above its 3-month average of 0.041704, with a range from 0.040994 to 0.042716.
MXN/JPY at 8.8966 is 1.7% above its 3-month average of 8.7476, trading in a fairly volatile 8.5% range from 8.4232 to 9.1351.
What could change it
- U.S. policy moves: faster or more aggressive Fed rate cuts, or a shift in risk sentiment, could impact MXN demand and volatility.
- Banxico policy surprises: unexpected inflation dynamics or a shift in the rate path could alter carry and pricing.
- Trade developments: escalation or resolution of U.S. tariffs on Mexican goods will affect near-term peso direction.
- Investment flows and risk appetite: shifts in nearshoring momentum or broader global risk appetite can influence demand for Mexican assets.
