USD/MXN to enjoy considerable gains towards 21.70 by end-2022 – SocGen
|Mexican peso holds a negative bias versus the US dollar. Economists at Société Générale expect the USD/MXN to march forward to the 21.70 level by end-2022.
Long-term bond yields to rise to 8.6% by end-2022
“A big question about Pemex’s debt burden also remains unresolved, which may have a big impact on both the bond and FX markets in the coming quarters.”
“The MXN will likely face weakening pressure somewhat in line with other EM currencies. However, domestic politics and energy sector policies, trade dynamics and the relative policy stance of Banxico (vis-à-vis the Fed) will all have a significant impact on the peso’s near-term trajectory.”
“We expect MXN to weaken to 21.70 against the USD and long-term bond yields to rise to 8.6% by end-2022.”
“Additional pressure on currency and bond yields is likely through 2023.”
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