USD/MXN: Mexican Peso might appreciate a bit further in the short-run – MUFG

The Mexican Peso showed another month of sizeable weakening in October. Economists at MUFG analyze MXN outlook.

Mexican Peso to weaken next year

The global risk-off mood keeps stronger USD, and therefore weaker MXN that might contaminate inflation. In such scenario, market does not expect any policy rate cut by Banxico at least until early next year. 

Assuming no escalation of Israel-Hamas conflict, MXN might appreciate a bit further in the short-run. But on a quarterly basis, we keep our outlook for MXN weakening path next year due to concerns over a global economic slowdown amid tighter monetary policies for longer worldwide. Such a scenario might spark further risk-off mood, hitting the high MXN. 

USD/MXN – Q4 2023 17.80 Q1 2024 17.90 Q2 2024 18.00 Q3 2024 18.10