USD/MXN: Mexican Peso to weaken gradually during 2024 – MUFG

FXStreet Insights Team FXStreet

The Mexican Peso appreciated further in December. Economists at MUFG Bank analyze MXN outlook.

MXN weakening path ahead

Regarding the perspectives during 2024, considering a gradual rate cut by Banxico starting sometime in the first half of the year, and policy rate ending at 9.00%, the carry-trade return might remain attractive in times of a gradual decrease of policy rates worldwide, so giving some support to MXN. And the outcome of the presidential election is not a source of concern, as Ms. Claudia Sheinbaum from Morena party is favourite to win the presidential election scheduled for the 2nd of June, on the back of the high approval rating of incumbent president Mr. Lopez Obrador.

However, we expect gradual MXN weakening during 2024 due to some uncertainties over the economic policies to be adopted by the next administration, once although signalling economic policy continuity, the influence of incumbent president and other Morena party leaders might constrain Ms. Sheinbaum's authority. On top of that, likely, Morena party will not have the required two-thirds majority in Congress to pass reforms.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD clings to humble gains around 1.1780

EUR/USD manages to reverse Tuesday’s pullback, sticking to daily gains around 1.1780 following an earlier bull run past 1.1800 the figure. The pair’s slight advance comes on the back of the equally marginal uptick in the US Dollar, as investors continue to closely follow developments on the trade front and news from the White House.

GBP/USD flirts with weekly tops north of 1.3500

GBP/USD leaves behind the previous day’s decline and regains fresh upside traction on Wednesday, surpassing the 1.3500 barrier in a context of a marginal advance in the Greenback and a generalised improved mood in the risk-associated universe. Meanwhile, the US tariff narrative continues to dictate the mood among market participants.

Gold picks up pace, focus on $5,200

Gold buyers are stepping back in on Wednesday, with sights set on $5,200 and potentially higher, after Tuesday’s pullback from monthly highs. The yellow metal’s recovery follows some loss of momentum in the US Dollar after Trump’s SOTU speech failed to deliver fresh impetus and AI-related jitters continue to fade.

Bitcoin, Ethereum and Ripple post cautious recovery amid downside risks

Bitcoin, Ethereum, and Ripple are posting a cautious recovery on Wednesday following a market correction earlier this week. BTC is approaching a key breakdown level, while ETH and XRP are rebounding from crucial support levels.

Nvidia remains at the heart of the AI boom

Nvidia remains at the heart of the AI boom, with Q4 revenue projected near $65.6–66.1 billion, nearly 70% higher year-over-year. But investors are watching cash flow, leverage, and broader AI adoption. Growth is strong, but the AI stress isn’t over.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.