USD/MXN: Peso vulnerable to sharp turns in risk sentiment – Wells Fargo

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29 September 2023

USD/MXN: Peso vulnerable to sharp turns in risk sentiment – Wells Fargo

Economists at Wells Fargo analyze the Mexican Peso (MXN) outlook.

Mexican Peso to weaken in the months ahead

While we expect the Mexican Peso and Peruvian Sol to weaken in the months ahead, sound underlying fundamentals and more cautious central banks should limit the extent of Peso and Sol weakness.

In the case of the MXN, while we forecast modest softness, risks are tilted toward more sizable weakness as political risks take shape early next year and as Peso valuations remain stretched, leaving the currency vulnerable to sharp turns in risk sentiment.

USD/MXN – Q4-2023 17.75 Q1-2024 18.25 Q2-2024 18.00 Q3-2024 17.75 Q4-2024 17.50 Q1-2025 17.25

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