The Mexican Peso is at risk of reversing its long-term uptrend. Several analysts say MXN has peaked and is on the way down. Negative fundamentals include the Mexican and US presidential elections and a narrowing MXN-supportive interest-rate differential. The Mexican Peso backs off a cliff on Thursday, trading down over half a percent in its key pairs, as investors unwind their long bets due to multiple risk factors on the horizon.
8 in the coming months as the rate differential converges,” Rabobank said in a note on May 28. The Mexican Peso could experience weakness against the US Dollar in particular as interest-rate expectations in the US undergo ossification. Whilst at the beginning of 2024 the Federal Reserve was confident it would be able to cut interest rates three times in 2024, with the first rate cut potentially coming in June, these expectations have been radically delayed because of stubbornly high inflation.