Mexican yields remain attractive, but investors may be reducing exposure to the MXN after a solid run to multi-year highs against the USD (which is down more than 13% against the MXN over the past year). 

Domestic yields have likely peaked and focus on the potential for rate cuts to start late this year as well as domestic issues (such as the looming election cycle) may be encouraging profit-taking. 

We anticipate USD/MXN ending the year at 17.90. 

USD/MXN – Q3-23 17.30 Q4-23 17.90 Q1-24 17.90 Q2-24 18.30