USD/MXN: Some Peso stability in the short-run and moderate weakening ahead – MUFG

In May, the MXN appreciated marginally from 18.005 to 17.718 against the USD. Economists at MUFG Bank discuss USD/MXN outlook.

Peso unlikely to weaken sharply

We expect the Fed to leave their policy rate unchanged and a US default to be avoided dampening upside risks for USD/MXN. 

Looking ahead, we keep our view for a moderate MXN weakening in the coming quarters influenced by a set of factors. The concerns with global economic slowdown, and especially a slowdown in the US that could curtail USD inflows into Mexico. 

On the local side, fear of additional government interference in private industry may be souring sentiment. But we don´t expect a sharp MXN weakening. 

USD/MXN: Q2 2023 17.800 Q3 2023 18.000 Q4 2023 18.200 Q1 2024 18.200.