Although the real interest rate outlook remains attractive for the time being, the support for the Peso from Banxico's restrictive monetary policy may have peaked.

Other issues are likely to come to the fore for the exchange rate: In addition to the US outlook, we think the main one will be the elections due in the summer. In this context, Mexico's persistent structural problems are likely to come to the fore again. The exchange rate developments of recent weeks confirm our view that the depreciation risks for the MXN are slowly increasing.