Experts see a peso at just under 18 to the dollar a year from now

A year from now, the Mexican peso will be trading at just under 18 to the US dollar, according to foreign exchange (FX) experts polled by Reuters.

The news agency polled 24 FX specialists between June 26 and July 1, asking them to forecast the USD:MXN rate 12 months from now.

The experts polled by Reuters warned that additional interest rate cuts by Banco de México would risk further weakening of the peso. However, Mexico’s central bank has held rates steady recently and has indicated that future cuts are unlikely.
(Moisés Pablo / Cuartoscuro.com)

The median estimate of the poll respondents was a USD:MXN rate of 17.78, a prediction that implies a slight depreciation of the peso over the next 12 months.

According to the Bank of Mexico, the peso closed at just under 17.50 to the dollar on Tuesday. A rate of 17.78 would represent a depreciation of 1.6% for the peso compared to the June 30 closing rate.

Reuters reported that “[e]xcept for a brief tumble at the start of 2020” — when the peso plummeted to around 25 to the dollar amid the then nascent COVID pandemic — Mexico’s currency “has traded between 16 and 22 per US dollar since July 2015, with a midpoint around 19.”

Citing its poll, the news agency wrote that the peso “will likely hold steady near the middle of its well-established trading range at least into the first ​half of 2027 … supported by foreign exchange market expectations for an ‌economic recovery.”

After a quarter-over-quarter contraction in the first three months of the year, the Mexican economy grew 1.2% in April compared to March and 2.2% on an annual basis.

The International Monetary Fund forecasts that the Mexican economy will expand 1.6% this year. Reuters reported that Mexico’s economic outlook “remains weak due to uncertainty over the future of the U.S.-Mexico-Canada Agreement (USMCA) on trade,” which is currently subject to a trilateral review process.

Analysts: Additional interest rate cuts could weaken the peso

Reuters reported that it was told by analysts that “the peso may soften if dovish policymakers push for the resumption of interest rate cuts, ​which would reduce carry trade flows to profit from Mexico’s relatively high cost of borrowing.”

However, rate cuts don’t appear likely in the near term.

The Bank of Mexico (Banxico) held its benchmark interest rate at 6.50% after a monetary policy meeting last week, and has indicated that it will maintain that rate in the near future.

The peso generally benefits from the difference between a higher interest in Mexico and a lower interest rate in the United States. The U.S. Federal Reserve’s federal funds rate is currently set at a 3.50%-3.75% range, meaning that it is 2.75%-3% lower than Banxico’s key rate. An additional interest rate cut in Mexico could reduce that gap and contribute to a weakening of the peso.

How did the peso perform in the first half of 2026? 

According to Banxico, the peso closed at 18.00 to the US dollar on Dec. 31, 2025 and just under 17.50 on Tuesday June 30. Therefore the peso appreciated 2.85% during the first six months of 2026.

The USD:MXN closing rate on Tuesday was slightly higher than the 17.32 rate from May 26 that Mexico News Daily used for its most recent MND Peso Index™ analysis. After calculating an implied exchange rate from the prices of the same 20 goods and services in Mexico and the United States, MND determined that the peso was overvalued by just over 4% in late May.

Using the same implied rate — 18.02 pesos per dollar — the peso, at Tuesday’s closing rate of 17.50 to the dollar, is overvalued by around 3%.

With reports from Reuters 

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