Outlook
The Mexican peso is expected to hold a relatively stable path in 2026, with forecasts calling for a narrow range around 18–20 pesos per U.S. dollar. Strength seen into the end of 2025, ongoing nearshoring activity, and Mexico’s anti‑inflationary stance by Banxico support a measured, orderly backdrop. Developments in U.S. policy and trade relations remain potential sources of volatility, but the trend is toward stability rather than a decisive move in either direction.
Key drivers
- Stable macro backdrop and improving fundamentals from nearshoring and foreign investment.
- Monetary policy: Banxico’s easing cycle supports domestic asset demand while U.S. policy expectations (Fed) influence yield differentials.
- Trade framework: U.S. tariffs on Mexican imports create uncertainty; Mexico is pushing to delay implementations to limit peso volatility.
- Market positioning: FX flows show the peso trading within a contained corridor as investors reassess risk and hedging needs.
Range
MXN/USD is at 7-day highs near 0.058129 USD per MXN, about 4.0% above its 3-month average (0.055874), and has traded within a relatively stable 7.8% range from 0.054040 to 0.058279.
MXN/EUR at 0.048810 per MXN, 2.3% above its 3-month average (0.047728), range roughly 0.046825 to 0.049108.
MXN/GBP at 0.042470 per MXN, 2.0% above its 3-month average (0.04165), range roughly 0.040994 to 0.042623.
MXN/JPY at 9.0724 per MXN, 3.9% above its 3-month average (8.731), range roughly 8.4169 to 9.1351.
What could change it
- A sharper shift in U.S. policy or a stronger dollar could push MXN weaker against the USD, eroding the current stability.
- A surprise in Banxico policy (faster or bigger-than-expected rate moves) could redefine carry dynamics and asset appeal.
- A breakthrough or escalation in U.S.–Mexico trade talks and tariff decisions could quickly alter risk sentiment and peso demand.
- A sustained acceleration or deceleration in nearshoring investment and broader risk appetite would shift the balance of Mexican assets, influencing short‑term FX moves.
