Private Sector Economists Expect Mexican Peso to Strengthen Against US Dollar
A recent survey conducted by the Bank of Mexico (Banxico) shows that private sector economic specialists have updated their expectations for the Mexican peso’s performance against the US dollar. The consensus among analysts is that the national currency will perform better than previously expected.
According to the survey results released by Banxico, institutions consulted now predict that the exchange rate between the dollar and the Mexican peso will close at 17.89 units by the end of 2024. This is an improvement from the previous expectation of 18.10 pesos per dollar.
In an election year for both Mexico and the United States, as well as in an environment where the chances of the US Federal Reserve cutting interest rates are decreasing, experts anticipate even greater strength for the Mexican peso. The expectation is that the peso will see increased strength due to the attractive interest rate differentials between the US and Mexico.
The Mexican peso has already positioned itself below 17.00 units in early May, reflecting optimism that rate cuts are unlikely in the near future. This favorable environment for investors has put the Mexican peso in a strong position against the US dollar.
Analysts predict that the exchange rate will average below 18.00 units throughout the year, with the highest level expected in November at 17.92 pesos per dollar. The expectations for the end of 2025 have also been revised downwards, with analysts forecasting an exchange rate of 18.65 units.
Furthermore, expectations regarding interest rates also support the strength of the Mexican peso. Analysts anticipate that Banxico will adopt a more conservative monetary stance than previously expected, with only a 100 basis point cut expected by the end of 2024.
Overall, the outlook for the Mexican peso remains positive, with expectations of strengthening against the US dollar and a more restrained monetary policy by Banxico. Investors are advised to stay informed and consider potential opportunities this changing landscape may present.