Amid ongoing pressures from US President Donald Trump on global trade, the market is betting on a more favorable outlook for the Mexican peso against the dollar throughout this year, with expectations of it hovering around 18 units, showing little change from last year. According to the latest survey by Citi, the forecast strengthened, moving from a projection of 19 pesos per dollar to 18.75 pesos by the end of 2026. This would place it very close to the levels observed at the end of 2025. It is worth recalling that at the end of last year, the exchange rate performed better than the market consensus, standing at 18 pesos per dollar, which represented a 13% annual increase for the Mexican currency. So far this year, the peso has already appreciated by a little over 3%, trading below the 17.50 unit mark per dollar. Experts agree that this strength is mainly related to the weakness of the dollar, which is expected to persist as President Trump maintains tensions in global trade. The peso is advancing amid geopolitical tension, breaking the $17.50 barrier per dollar. These pressures were evident this week, coinciding with the Davos forum where Trump reaffirmed his ambitions for Greenland, although he ruled out military intervention and, for the moment, applying tariffs to European economies. Concurrently, the dollar had its worst week to date, with a cumulative drop of 1.14% as measured by the Bloomberg Dollar Index, due to the persistence of 'the US political nightmare,' as described by Brent Donnelly, president of Spectra Markets and a former currency trader, cited by Bloomberg following tensions over Greenland. According to Citibanamex, the peso will also withstand the Trumpist onslaught due to the interest rate differential between the two countries. This is because while the market in the United States is attentive to a more flexible shift in the monetary policy of the Federal Reserve (Fed), in Mexico, they anticipate that the central bank will moderate the interest rate cuts. For specialists, this will continue to be a crucial factor that will shield the currency even from the volatility estimated during the mid-year review of the USMCA.
