Home » USD/MXN: Mexican Peso might weaken in the next few months – MUFG

USD/MXN: Mexican Peso might weaken in the next few months – MUFG

by FX BrokerNews

USD/MXN fell in February from 17.17 to 17.06. Economists at MUFG Bank analyze Mexican Peso’s outlook.

MXN weakening path ahead

The Mexican Peso (MXN) is poised for potential weakening in the coming months, driven by a dovish tone in Banxico minutes and disappointing industrial production and retail sales figures, potentially prompting an earlier rate cut by Banxico compared to the Federal Reserve. Despite some Banxico members considering synchronization with the Fed, uncertainties remain.

Starting from June onward, MXN is anticipated to be more significantly influenced by expectations related to the new government and its policies. Eurasia analysts project an 80% chance of Ms. Claudia Sheinbaum becoming the next president after the June 2nd election. The Morena party is expected to maintain a majority in both the Lower House and Senate, as well as among state governors. However, the government coalition may fall short of a two-thirds majority in Congress, necessitating negotiations with the opposition for key reforms.

Adding to the economic landscape, the upcoming US election in November and potential shifts in immigration and trade policies could exert pressure on Mexico’s economy, contributing to a gradual weakening of the MXN.

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