While the exchange highlights long-standing sensitivities between the two nations, the Peso’s muted response suggests investors are prioritising economic fundamentals, particularly monetary policy, over political noise. Dollar to Mexican Peso exchange rate chart for the last 8 hours and exchange rate forecast for the next 8 hours. At the live current USDMXN exchange rate 1 USD is worth n/a MXN which is a change of n/a from the previous day’s closing price. Over a week USDMXN is n/a, compared to its change over a month of n/a and one year of n/a. Another reason for Mexico weak growth is the double-digit interest rates, which is a drag on Mexico’s economy. In all, the Mexican Peso is not expected to rebound sharply this year (or at least in the first half) due to adverse macro factors.
MXN Trend Forecasting
The rate between the United States Dollar and the Mexican Peso changes constantly due to various market forces. The United States Dollar (USD) is the official currency of the United States. Many international trade deals are done in USD, and many countries hold it as their main reserve savings. The Federal Reserve, the US central bank, issues it, and it is divided into 100 cents.
It is reasonable to presume that the high interest rate of 11.25% and a steady economic growth pace are likely to support the Mexican peso exchange rate at the beginning of 2024. It is worth noting that there have been no signals from the central bank so far about the plans to reduce the interest rate. In the future, the situation will depend on the inflation rate, the GDP, and oil prices. If the oil quotes continue to rise, this may additionally bolster the peso. Conversely, their decline may help the US dollar strengthen against the peso.
Historical and forecast chart of the US Dollar/Mexican Peso currency pair
- While the Federal Open Market Committee (FOMC) is widely expected to hold the federal funds rate at 4.25%, the key focus for investors will be the messaging that accompanies the decision.
- Consequently, the Greenback rose to the detriment of the Mexican Peso as news headlines crossed the wires, with the USD/MXN soaring from around multi-year lows to 18.15 on April 19.
- His victory keeps the financial markets on their toes as some of his policies tend to be protectionist and focused on domestic issues.
- Stay tuned to our page—for metrics, try to refresh periodically—to get the latest updates on the dollar’s standing and make informed decisions about your financial exchanges.
- However, Banco de Mexico (Banxico) began its easing cycle on March 21 by reducing rates by 25 bps.
These signals can help automate trading in special programmes – trading advisors. The FOMC projects inflation to fall to 2.8% in 2023 and 2.3% in 2024, declining from the 5.4% forecasted for 2022. Furthermore, the International Monetary Fund (IMF) expects inflation to fall from 8.1% in 2022 to 3.5% and 2.2% in 2023 and 2024, respectively. Copyright © 2025 FactSet Research Systems Inc.© 2025 TradingView, Inc. Make the best decisions about the future of your business with the most reliable economic intelligence.
Target values of the USD/MXN currency pair as of 05-15-2025.
These predictions are intended as informational guidance only and are not guarantees. We recommend conducting your own research and consulting with a financial advisor before making trading decisions based on forecasts for the United States Dollar or Mexican Peso. It has a long history, with the modern version dating back to 1863.
Therefore, the pair will likely continue falling in the next six months of the year. This view will be confirmed if the pair moves below the year-to-date low of 18.50. Historically, the US dollar has been a better performer than the Peso because of its role as a safe haven and reserve currency. As shown below, sending $1,000 from the US to Mexico is free when using XE and $10.82 when using Wise. While XE is free, the recipient will experience fewer deductions when using Wise because it offers a better exchange rate.
If Mexican President Claudia Sheinbaum reaches agreements with Trump’s agenda, that could remove one factor and leave market players focused on purely economic themes. On the monetary policy front, the Federal Reserve cut rates by 100 basis points in the second half of 2024, leaving the fed funds rate at the 4.25%-4.50% range. Meanwhile, Banxico slashed borrowing costs by an additional 75 bps of cuts, which added to the already 50 bps cut earlier, leaving the main interbank lending rate at 10.00%. Technical analysis for USD/MXN trading involves studying historical price data, identifying trends, support/resistance levels, and chart patterns, and using indicators like RSI and MACD.
- You can either visit each currency broker individually or use our currency quote comparison tool to request multiple exchange rates.
- As a result, the Mexican economy expanded at a faster pace by 4.8% in 2021 and 2.1% in 2022 than was expected.
- Fundamental factor analysis can be employed for both short-term USD/MXN trading during impactful news and long-term trading, primarily based on changes in regulators’ monetary policies.
- Early signs of falling inflation fueled speculation of a less hawkish Fed.
- Further price fluctuations will depend on the extent economic data releases for the U.S. and Mexico, scheduled or unscheduled, deviate from expectations.
- In June 2024, Mexico will hold its presidential election, followed by the US presidential election in November of the same year.
Other factors contributing to the peso’s volatility include geopolitical events, particularly those affecting trade relations with the United States, Mexico’s largest trading partner. Fluctuations in global commodity prices, such as oil, also impact the peso’s exchange rate due to Mexico’s significant oil exports. Additionally, investor sentiment, market speculation, and changes in global financial conditions can lead to rapid fluctuations in the value of the peso. Central banks, such as the US Federal Reserve and the Bank of Mexico, influence the USD/MXN market through decisions on interest rates, monetary policy, currency interventions, and economic data releases. Their actions and statements play a significant role in shaping market sentiment and impacting the exchange rate. The pivotal factors influencing further movements in the USD/MXN pair could be the economic growth pace in these countries, central banks’ policies, oil price trends, and the upcoming presidential elections.
Even though the board agrees that easing policy is needed, they also acknowledged the pace should be reduced. Additionally, the Mexican institution opened the door to large-scale rate cuts after tweaking its policy statement. “In view of the progress on disinflation, larger downward adjustments could be considered in some meetings, albeit maintaining a restrictive stance,” it said. In the US, the Summary of Economic Projections (SEP) showed that Fed policymakers estimate the US economy will grow 2.1% in 2025, up from the 2% previously expected. The Mexican Peso began the first quarter of 2024 on the front foot, appreciating modestly due to the so-called carry trade. The interest rate differential between Mexico and the US, of more than 575 basis points (bps), benefitted the former.
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The first resistance would be the 2024 peak at 20.83, followed by the 21.00 mark. Once cleared, key resistance levels emerge at the March 2022 peak at 21.46, followed by the 22.00 figure ahead of the November 2021 high at 22.15. Mexico’s economy is expected to underperform compared to the past two years.
On the weekly chart, the pair crashed below the key support level plus500 canada at 19.42, the lowest point on May 30th. The Fed, on the other hand, hiked by 0.25%, bringing rates to 4.75%. With the labor market tightening and inflation stubbornly high, it is expected that the Fed will push interest rates above 5.5% in 2023. Therefore, the spread between Mexico’s and US interest rates has continued to widen. Perhaps, the biggest reason why the USD to MXN pair has fallen is the number of companies that are moving from Asia to Mexico amid geopolitical tensions. As a result, the Mexican economy expanded at a faster pace by 4.8% in 2021 and 2.1% in 2022 than was expected.
In February, Banxico hiked interest rates by 0.50% and pushed rates to a record 11%. There is the expectation that the bank will deliver several smaller hikes later this year. Further, cross-border payments have contributed to the strong performance of Mexico’s economy. There are millions of people in Mexico who send billions of dollars back home every year.
However, tensions in the Middle East were about to rise, spurring the first spike in the exchange rate. Explore more forecasts involving United States Dollar (USD) paired with other major currencies. These longer-term projections provide a reference for itrader review strategic financial planning, keeping in mind that forecast accuracy typically decreases over extended periods.
Central banks FAQs
Mexican and US regulators are implementing tighter monetary policies to reduce mounting inflationary pressure, with interest rates at 11.25% and 5.5%, respectively. The peso benefits from a higher interest rate, and the interest rate difference is likely to persist over the next six months. The Bank of Mexico (Banco de México, Banxico), the country’s central bank, has been tightening its monetary policy since lexatrade review June 2021 to achieve the inflation target of 3%. Since then, the interest rate was hiked 15 times, rising from 4% to 11.25% at the time of drafting this article on 15 November 2023.
As such, the imbalance of these flows is usually tilted towards Mexico. Studies show that remittances from the US to Mexico surged to over $51 billion in 2021. Second, the Mexican economy is benefiting from the vast amount of American government spending. In the past few years, the US has spent trillions of dollars to shore up its economy. Most of these funds have been channeled to Mexico, which is one of the biggest of America’s trading partners. To come up with the latest USD to MXN forecast, we need to understand why the pair is seeing a downward trend for months.
The sell-off sent shares down to a more than four-year low near $340. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. Meanwhile, Federal Reserve officials have adopted a more cautious stance as data suggested that the economy “is in a very good place,” according to Fed Chair Jerome Powell.