Outlook
The Mexican peso faces a mixed backdrop: growth remains modest but steady, while Banxico’s pause in easing preserves attractive real-yield differentials. Near-term prospects point to range-bound trading, with upside or downside contingent on US-Mexico policy developments, global risk appetite, and persistent inflation pressures at home. Markets will also weigh USMCA revisions slated for July 2026 and ongoing nearshoring investment flows that bolster Mexico’s manufacturing base.
Key drivers
- Citi’s latest survey points to a median GDP growth of 1.3% for Mexico in 2026, with the peso seen trading around 19 per US dollar by year-end (growth and policy expectations underpin the FX path). (Citi)
- Banxico has paused its easing cycle, keeping the policy rate at 7%, to guard against persistent core inflation. This stance helps maintain attractive real yield differentials (the interest rate advantage versus the US) that support the MXN. (Banxico)
- USMCA revisions are expected during the July 2026 review, with potential annual evaluations that could introduce uncertainty for businesses, especially in energy sectors, and influence peso sentiment. (Bank of America source)
- Nearshoring and foreign investment remain robust, with sizable FDI in manufacturing from global players like Heineken and Unilever underpinning Mexico’s growth and the peso. (Policy and investment news)
Range
MXN/USD at 0.057257, 3.1% above its 3-month average of 0.05553, having traded in a fairly volatile 8.9% range from 0.053496 to 0.058279.
MXN/EUR is at 14-day lows near 0.048273, 1.6% above its 3-month average of 0.047538, having traded in a quite stable 5.0% range from 0.046600 to 0.048915.
MXN/GBP is at 14-day lows near 0.041816, just 0.7% above its 3-month average of 0.041529, having traded in a very stable 3.9% range from 0.040976 to 0.042584.
MXN/JPY at 8.8751, 2.5% above its 3-month average of 8.6623, having traded in a quite volatile 10.4% range from 8.2185 to 9.0702.
What could change it
- Outcomes of the USMCA July 2026 revisions and any placement of annual evaluations that affect trade and investment sentiment.
- Any shift in Banxico’s policy path if inflation dynamics materially diverge from expectations (core inflation trend, wage pressures).
- Shifts in global risk sentiment and US monetary policy that alter dollar strength or MXN risk premiums.
- Sustained nearshoring investment and export-sector momentum that keeps Mexico’s growth and yield differentials attractive.
