Outlook
Outlook: Markets project the peso to stay broadly stable in 2026, with a rough target band around 18–20 MXN per USD. On the spot, the MXN has traded with modest firmness against the dollar, with current readings around 0.058 USD per MXN (7‑day highs), roughly 4% above its 3‑month average. In MXN per USD terms, this implies a range roughly in the mid-to-high teens per USD, within a balanced path supported by nearshoring momentum and a gradual easing tone from Banxico relative to the U.S. Fed. Tariff risks remain a potential swing factor, but the baseline view leans toward continued stability for the peso in the near term.
Key drivers
Key drivers:
- Banxico’s inflation-fighting stance and the 2025 easing cycle (150 basis points cut to 7.50% by September) shaping carry dynamics against the Fed.
- U.S. rate path and its relative stance to Banxico; diverging policy expectations can shift demand for Mexican assets.
- Trade tensions and tariff negotiations with the United States, particularly on autos, affecting near-term volatility.
- Nearshoring and foreign investment boosting Mexican manufacturing demand for assets, providing a supportive backdrop for the peso.
Range
Range:
MXN-USD (USD per MXN): 7-day high 0.058145; 3-month average 0.055913; range 0.054040–0.058279.
MXN-EUR (EUR per MXN): 0.048911; 3-month average 0.047749; range 0.046825–0.049108.
MXN-GBP (GBP per MXN): 0.042648; 3-month average 0.041666; range 0.040994–0.042648.
MXN-JPY (JPY per MXN): 8.9834; 3-month average 8.735; range 8.4232–9.1351.
What could change it
What could change it:
- A surprise shift in Banxico’s policy relative to the Fed (higher or lower for longer than priced) impacting carry and demand for Mexican assets.
- Tariff developments — either delays that reduce uncertainty or new measures that heighten volatility.
- A stronger or weaker global risk tone, affecting risk appetite and dollar strength.
- A sustained outperformance or underperformance of Mexico’s economic data, altering relative interest-rate expectations and flows.
