Exchange Rate Calculator

The exchange rate between the Canadian Dollar (CAD) and the Mexican Peso (MXN) has experienced notable fluctuations over the past few months. This report provides an analysis of the recent trends, underlying factors influencing these movements, and projections for the near future.

Recent Exchange Rate Trends

Between December 2024 and March 2025, the CAD/MXN exchange rate exhibited a downward trend. On December 31, 2024, the rate peaked at 14.500 MXN per CAD. By March 14, 2025, it had declined to 13.851 MXN per CAD, marking a decrease of approximately 4.5% over this period. The average exchange rate during these months was around 14.237 MXN per CAD.

Factors Influencing the Exchange Rate

Several factors have contributed to the observed fluctuations in the CAD/MXN exchange rate:

1. Economic Performance: Canada's economic indicators, such as GDP growth and employment rates, have shown moderate growth. In contrast, Mexico's economy has experienced stronger growth, bolstered by robust manufacturing exports and remittances. This disparity has strengthened the MXN relative to the CAD.

2. Monetary Policies: The Bank of Canada has maintained a cautious approach to interest rate adjustments, focusing on controlling inflation without stifling growth. Meanwhile, the Bank of Mexico has adopted a more aggressive stance, raising interest rates to combat inflation, thereby attracting foreign investment and increasing demand for the MXN.

3. Commodity Prices: Canada's economy is heavily reliant on commodity exports, particularly oil. Fluctuations in global oil prices have directly impacted the CAD's value. A decline in oil prices during this period has exerted downward pressure on the CAD.

4. Trade Relations: Both countries are significant trading partners with the United States. Any changes in trade policies or agreements, such as modifications to the USMCA, can influence investor confidence and currency valuations.

Forecasts and Projections

Looking ahead, various forecasts suggest a continuation of the current trend:

• Short-Term Forecasts: Some analysts predict that the CAD/MXN exchange rate may decline to approximately 13.210 MXN per CAD in the near future, representing a potential decrease of around 6.6% from current levels.

• Medium-Term Projections: Other projections indicate a possible drop to 12.76 MXN per CAD within the next three months, reflecting a decrease of about 9.5%.

• Long-Term Outlook: Over the next five years, the exchange rate is expected to stabilize around 14.77 MXN per CAD, suggesting a decrease of approximately 6.6% compared to current rates.

Implications for Stakeholders

For businesses and investors engaged in transactions between Canada and Mexico, these trends have several implications:

• Importers and Exporters: Canadian exporters to Mexico may face reduced competitiveness due to a stronger MXN. Conversely, Mexican exporters to Canada could benefit from more favorable exchange rates.

• Investors: Those holding assets denominated in CAD may experience diminished returns when converted to MXN. Diversifying portfolios to include assets in both currencies could mitigate potential losses.

• Travelers: Canadian tourists visiting Mexico will find their purchasing power reduced, while Mexican tourists in Canada will benefit from more favorable exchange rates.

Conclusion

The CAD/MXN exchange rate has been on a declining trajectory over the past few months, influenced by economic performance disparities, differing monetary policies, commodity price fluctuations, and trade relations. Forecasts suggest this trend may continue in the short to medium term. Stakeholders should monitor these developments closely and consider appropriate strategies to mitigate potential risks associated with currency fluctuations.