The annual inflation rate is showing signs of a gradual slowdown but remains above the central bank’s target of 3%, standing at 4.26% according to the October data. The Bank of Mexico expects inflation to fall to the target level approximately by Q4 2024. The base currency in the USD/MXN pair is the US dollar (USD), the official currency of the US and the global reserve currency in international trade and financial markets. It is considered a benchmark currency and the most widely used asset in transactions worldwide. The USD/MXN pair is one of the most popular currency pairs in Latin American financial markets.
Lower inflation and rising recession risks could push the Fed to slam its brakes on rate hikes. As illustrated, the Mexican Peso has been gaining against the US dollar in the past few months. Analysts believe that fundamentals are supportive of the Mexican Peso because the US economy is expected to lag that of Mexico. Markets roared back to life as the US and China hit pause on their escalating trade war, with both sides emphasizing mutual respect and dignity. But it wasn’t the fine print that moved markets—it was the mood shift.
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- These signals can help automate trading in special programmes – trading advisors.
- Banxico is expected to continue its loosening cycle, with estimates that the primary reference rate would be lowered from 10.00% to 8.00%, according to Banxico’s private survey.
- On the weekly chart, the pair crashed below the key support level at 19.42, the lowest point on May 30th.
- As such, we can predict that the trend will continue in the long term.
- Inflation had risen to 2.8% in November, indicating that monetary policy wasn’t as restrictive as many Fed officials thought.
- The highest trading volume for this currency in the international foreign exchange market occurs when it is paired with the US dollar.
Other factors contributing to the volatility of the USD include geopolitical events, trade policies, and political stability. Market speculation and investor sentiment also play crucial roles, as do global economic conditions and fluctuations in commodity prices, particularly oil. Additionally, shifts in demand for the dollar as a safe-haven asset during times of uncertainty can lead to rapid changes in its exchange rate. The exchange rate of the American dollar is highly volatile due to several factors. Economic indicators such as ndax review GDP growth, employment rates, and inflation significantly impact the USD’s value. Changes in U.S. monetary policy, particularly interest rate adjustments by the Federal Reserve, can strengthen or weaken the dollar against other currencies.
Some amounts at current USD to MXN exchange rate:
However, the services sector continues to outperform manufacturing, supported by subsequent government increases in minimum wages. Overall, growth is expected to be sluggish due to the Government’s fiscal consolidation plan, which was considered in the 2025 budget, and Banxico’s still-high interest rates. Projected yearly exchange rates for USD to MXN over the upcoming decade. View the projected month-by-month exchange rate forecast for USD to MXN covering the upcoming two years.
How is the United States Dollar vs Mexican Peso rate determined?
The reading, which captures activity across both the manufacturing and services sectors, reinforces concerns that the US economy is cooling more rapidly than expected. Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research. Mexico has one of the largest economies in the world – ranked 15th with a dollar GDP value of $1.8 trillion and a population exceeding 130 million. However, real economic growth this year is anticipated to slow down. Of course, if you do not need the foreign currency right now, another viable strategy is to sit on USD and see if the rate may drop further. Macro currents are highly unpredictable now due to the new US administration.
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Traders analyse charts, apply tools like Fibonacci retracements, and consider volume to make informed decisions about potential future price movements. High inflation and slowing economic growth, along with fears over the banking sector’s stability, help create conditions for a potential recession. The USD may decline against the peso and other world currencies in such a scenario. The US Federal Reserve also aims to curb mounting inflation by tightening monetary policies. Since 2022, the interest rate has gradually risen from 0.25% to 5.5%, significantly affecting the exchange rate of the US dollar, which had strengthened against several world currencies over this period.
Because of its global importance, decisions about US interest rates and the economy greatly affect the USD’s value and economies everywhere. The USD/MXN exchange rate is primarily influenced by factors such as interest rates, economic indicators, trade balances, political stability, global events, inflation rates, commodity prices, and market sentiment. Inflation forecasts and subsequent central bank monetary policy could precipitate long-term weakness for the future U.S. dollar. The greenback made a sudden 1.32% decline against the Mexican peso after a 0.5% decrease in the expected annual rate of U.S. inflation was reported. Consumer Price Index number thwarted expectations at 7.7%—down from the projected 8.2%.
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The pandaforecast.com portal is not responsible for the loss of your money in the stock market as a result of using the information contained on the site. The currency’s trajectory will likely be heavily influenced by the interplay between Mexico’s monetary policy powertrend and its economic growth relative to the US. This would usually favor further USD/MXN upside, as the interest rate differential would reduce. The Peso will be influenced by economic growth, monetary policy, inflation, and – you’ve guessed it – US President-elect Donald Trump.
Discover today’s USD/MXN live exchange rate forecast, updated daily. Track currency trends, analyze historical charts, and explore monthly and yearly predictions for smarter trading and financial vantage fx planning. The strength of the Mexican Peso (MXN) can vary and is influenced by economic factors. It is recommended to check current exchange rates and economic indicators for the latest assessment of the currency’s strength. In 2023, The USD/MXN currency pair exhibits a downtrend, reflecting the strengthening of the Mexican peso against the US dollar.
The currency then strengthened post-pandemic, thanks to Banxico’s double-digit policy rate, and strong inflows of tourists, remittances and export revenue. However, the peso slumped in 2024 due to rising concerns over the weakening of democratic safeguards at home and fears of Trump tariffs. The Mexican Peso remains highly sensitive to shifts in global risk sentiment and developments in the United States, which accounts for nearly 80% of Mexico’s exports.
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Most recently, the USD/MXN price has been in a strong downward shift, helped by the ongoing deglobalization trends. As more American companies move away from China, they are finding Mexico to be a good alternative. Reviews and comparisons of the best money transfer providers, banks, and apps. UnitedHealth Group stock slumped 10.4% in Tuesday’s premarket after the United States’ largest private health insurer said it would suspend guidance for 2025 due to increasing healthcare costs.
- As more American companies move away from China, they are finding Mexico to be a good alternative.
- We will study the pair’s performance in 2023 and explore experts’ opinions on its outlook for 2024.
- Economic indicators such as GDP growth, inflation, and employment rates in Mexico significantly impact the MXN’s value.
- The results of forecasts of the US Dollar/Mexican Peso currency pair are shown below and presented in the form of charts, tables and text information, divided into time intervals (Next month, 2025, 2026 and 2027).
- Dollar to Mexican Peso exchange rate prediction for tomorrow and the next trading days.
- For example, following an acute phase of the crisis, in 2020 the daily chart of the USD/MXN pair formed a Triangle pattern.
The pair has moved below the 50-week and 200-week exponential moving averages (EMA). The two MAs have made a bearish crossover, meaning that the pair will likely continue falling, with the next important level being at 17.47, the lowest point on July 2017. That’s because Mexico has lower labor standards than the US and the country is a member of USMCA (a replacement of NAFTA that allows trade to flow smoothly between the US, Mexico, and Canada). The USD/MXN cross has been around for decades because of the close geographical and economic relationship between the United States (US) and Mexico. Mexico started using the Peso during its colonial period while the US dollar was introduced in 1862.
Mexico’s economic indicators show that the economy continues developing, even amid the high rate of the central bank. The country’s GDP is experiencing steady growth, rising by 3.3% in October 2023 compared to the previous year. The second currency in this pair is the Mexican peso (MXN), the national currency of the United Mexican States. The highest trading volume for this currency in the international foreign exchange market occurs when it is paired with the US dollar.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
Its stability, backed by the U.S. economy, and its role in global transactions make it a key currency for governments, businesses, and investors. The USD’s widespread acceptance and liquidity enhance its importance in the global financial system. Below is a forecast of Mexican Peso versus the U.S. dollar (USD/MXN) broken down by month. This forecast is produced based on prior values of the USD/MXN along with other currency exchange rates. To learn more about how this forecast is produced, please see our methodology page.