USD/MXN to hit 18.50 on a break of the 18.40 mark – CIBC
|The path of least resistance is for a weaker MXN going forward, in the view of economists at CIBC Capital Markets.
Shifting labour dynamics in the US to remain the largest downside risk for the Peso
A break of the 18.40 mark should send USD/MXN towards 18.50, its highest level since March.
Going forward, however, we highlight that as the Fed maintains its higher for longer narrative, we expect shifting labour dynamics in the US (through its effect on remittances to Mexico) to remain the largest downside risk for the Peso, while a move away from the fiscal conservatism seen so far in the AMLO administration is starting to create some concerns in debt markets.
We maintain our end-of-year USD/MXN forecast at 18.00 and 18.50 for Q1 2024.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.