Mexico’s peso is expected to remain within the same mid-range band that has defined its behaviour for nearly a decade, according to a recent Reuters poll.
Since July 2015, the currency has traded between 16.00 and 22.00 per US dollar, averaging around 19.20 at the midpoint and breaching the upper boundary only once, during the peak of the COVID-19 crisis in 2020.
Analysts surveyed by Reuters between November 28 and December 3 see little reason for that pattern to change as 2026 approaches.
They forecast the peso will weaken modestly by 3.4% to end at 18.92 per dollar in 12 months, after closing at 18.27 on Tuesday — a level that places it near the centre of its long-standing trading band.
The peso’s performance has been characterised by its stability within this range, even through political upheavals, shifting global cycles and the pandemic shock.
That resilience has set it apart from many emerging-market peers. The latest projections reinforce expectations that such stability will hold, despite mounting risks both at home and abroad.
Challenges facing Pesos
Although forecasts suggest the peso will remain broadly stable, some analysts warn that the balance of risks is shifting.
Finamex economist Christian Admin de la Huerta Avila said “risks surrounding our MXN forecast remain balanced, although with a slight bias towards depreciation.”
He pointed to signs of slowing economic activity and softer remittance inflows as factors that could weaken support for the currency.
Remittances have long served as a stabilising pillar for Mexico’s economy. Any indication of a downturn in these flows threatens a key source of household spending and foreign-exchange inflows, which could weigh on the peso.
Monetary policy poses another risk. Mexico’s central bank, Banxico, is expected to gradually ease policy after maintaining one of the most restrictive stances in Latin America.
The outlook in the United States is less clear: while the Federal Reserve is expected to cut rates this month, policymakers may pause the easing cycle afterwards.
A widening policy gap could pressure the peso by eroding the interest-rate advantage that has supported demand for peso-denominated assets.
That differential has been central to attracting foreign investors. Any shift in the relative stance between the Fed and Banxico could spur speculative moves against the peso, raising questions about its ability to remain comfortably within its long-standing trading band.
Brazil’s real is also expected to ease
The poll also highlighted trends in other major Latin American currencies.
Brazil’s real is projected to weaken 3.1% to 5.50 per dollar over the next year, from 5.33 on Tuesday.
Despite the expected pullback, the real has gained 15.9% so far this year.
The consensus forecast places the currency at 5.38 per dollar by the end of 2025, implying a 14.9% rise for 2024 — its strongest annual performance since a 21.8% jump in 2016.
Mexico’s peso has likewise posted strong gains this year, up 13.9%, and remains on track for a 12.5% annual increase, which would be its biggest advance since the 14.9% rise recorded in 2023.
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