In 2023, the Mexican Peso (MXN) gained around 15% against the US Dollar (USD) on a spot yield basis. Rabobank economists analyze the outlook for the MXN.
The MXN will perform better than most of its emerging counterparts
Banxico will start cutting rates this year, and we expect at a faster pace than the Fed, but currencies are a relative play, and the rest of the Latam region has already started cutting rates, so the MXN remains relatively attractive compared to the rest of the region. Adjusting for volatility and liquidity, we continue to view the MXN as the most attractive carry currency in the world.
Although we see some potential weakness against the USD later in the year as Banxico's rate cuts kick in, we expect the MXN to outperform most of its emerging market peers.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
