The Fed nearing the start of its easing cycle in 2Q 2024 and the beginning of the end of QT, perhaps by June, coupled with Banxico’s sound monetary policy management, structural support (nearshoring) and high remittances, should keep the MXN relatively attractive. Low external imbalances and limited policy uncertainty should also help.

The US elections will probably generate a lot of noise but could be net positive for Mexico given its geopolitical position with respect to China. 

Technically, high carry-to-vol, constructive positioning, and a neutral long-term valuation vs. an overvalued USD should lend additional support to the MXN.