Outlook
The MXN is likely to remain under modest pressure in the near term. A subdued domestic growth backdrop and tariff changes add external headwinds, with a Citi survey forecasting the peso weakening toward around 19 per USD by year-end. Banxico’s hold at 7.25% signals a pause rather than an imminent easing path, which reduces near-term volatility but leaves the currency sensitive to shifts in trade news and US dollar strength. A tourism rebound and related infrastructure spending in Mexico City could provide some support if risk appetite holds. Price action sits near 90-day levels, with USD/MXN around 0.05725 and a wider observed range roughly between 0.05350 and 0.05725, underscoring a contained but real near-term tilt.
Key drivers
- GDP growth forecast: A Citi survey reported by mexiconewsdaily.com puts 2026 GDP around 1.3%, with the peso seen weakening toward about 19 per USD by year-end.
- Monetary policy: Banxico has kept the policy rate at 7.25%, signaling a pause in the easing cycle.
- Trade policy: Tariffs of up to 50% on imports from China and other non-FTA countries, affecting more than 1,400 product categories, effective January 1, 2026.
- Tourism sector: Nearly 6 million additional visitors expected in the June–July 2026 period, with infrastructure upgrades underway to support the influx.
- Market price action snapshot: USD/MXN around 0.05725 (90-day high), within a 0.05350–0.05725 range; MXN/EUR around 0.04870 (range 0.04647–0.04892); MXN/GBP around 0.04240 (range 0.04070–0.04258); MXN/JPY around 9.0738 (range 8.2185–9.0738).
Range
MXN/USD: current around 0.057251; 90-day range roughly 0.053496–0.057251.
MXN/EUR: current around 0.048702; range roughly 0.046468–0.048915.
MXN/GBP: current around 0.042403; range roughly 0.040695–0.042584.
MXN/JPY: current around 9.0738; range roughly 8.2185–9.0738.
What could change it
- A shift in Banxico policy: an earlier-than-expected cut or a surprise hike could alter the peso’s trajectory.
- Trade developments: escalation or resolution of tariffs, new trade agreements, or changes in external demand could swing MXN sentiment.
- Domestic growth/inflation surprises: stronger-than-expected growth or inflation data could push Banxico to adjust policy or alter risk appetite for the peso.
- Tourism/remittance and risk sentiment: larger-than-expected tourism inflows or remittance boosts, or shifts in global risk appetite, could provide support or add pressure depending on the direction of flows.
- US dollar dynamics: broad moves in US rates and dollar strength/weakness will continue to influence MXN moves as a proxy for risk-on/risk-off sentiment.
