Exchange Rate Calculator

The exchange rate between the Mexican Peso (MXN) and the United States Dollar (USD) has experienced notable fluctuations over the past few months, influenced by a combination of economic policies, trade relations, and global market dynamics. As of June 27, 2025, the USD/MXN exchange rate stood at 18.86, indicating a strengthening of the peso compared to earlier in the year. (ycharts.com)

Recent Exchange Rate Trends

In the first half of 2025, the Mexican peso demonstrated resilience against the US dollar. Starting the year at approximately 19.04 MXN/USD, the peso appreciated to 18.86 by late June. This trend reflects a 0.95% strengthening of the peso over the six-month period. (ycharts.com)

Factors Influencing the Exchange Rate

Several key factors have contributed to the recent performance of the MXN/USD exchange rate:

Monetary Policy: The Bank of Mexico (Banxico) maintained its benchmark interest rate at 8.00% in June 2025, following a 50 basis point cut earlier in the year. This rate remains significantly higher than the U.S. Federal Reserve's rate of 4.50%, attracting carry trade flows that favor the peso. (tradingeconomics.com)

Trade Relations: Despite the U.S. administration's escalation of tariffs in early 2025, the peso remained relatively stable. Successful negotiations by Mexican President Claudia Sheinbaum helped moderate the impact of these tariffs, contributing to the peso's stability. (reuters.com)

Oil Prices: As a leading oil exporter, Mexico's economy benefits from higher oil prices. The recovery in global oil prices has bolstered Mexico's fiscal and trade balances, providing support to the peso. (vantofx.com)

Remittances: Remittances from Mexican workers abroad, particularly from the U.S., have remained robust, injecting a steady flow of dollars into the Mexican economy and supporting the peso. (vantofx.com)

Forecast and Outlook

Looking ahead, forecasts suggest a modest depreciation of the peso. A Reuters poll conducted in April 2025 projected the peso to weaken to 20.55 MXN/USD over the next six months, a 0.4% decline from its current level. This anticipated depreciation is attributed to potential new U.S. tariffs and adjustments in interest rate differentials. (reuters.com)

However, other analyses predict a strengthening of the peso. For instance, CoinCodex forecasts the USD/MXN exchange rate to decrease by 12.63% over the next six months, reaching 17.10 MXN/USD. (coincodex.com)

Trading Strategies

Given the current and projected exchange rate dynamics, several trading strategies may be considered:

Carry Trade Strategy: With Mexico's interest rates significantly higher than those in the U.S., investors might consider borrowing in USD and investing in MXN-denominated assets to capitalize on the interest rate differential. This strategy benefits from the positive carry but carries risks if the peso depreciates unexpectedly. (ebc.com)

Mean Reversion Strategy: The USD/MXN pair has exhibited mean-reverting behavior within the 18.80–19.50 range. Traders could consider buying USD/MXN near the lower end of this range and selling near the upper end, capitalizing on short-term fluctuations. (ebc.com)

Event-Driven Trading: Monitoring key economic events, such as central bank meetings and trade negotiations, can provide opportunities for event-driven trades. For example, announcements of new tariffs or changes in interest rates can lead to significant short-term volatility in the USD/MXN exchange rate. (ebc.com)

Conclusion

The MXN/USD exchange rate has been influenced by a complex interplay of monetary policies, trade relations, commodity prices, and remittance flows. While the peso has shown resilience in the first half of 2025, future movements will depend on developments in U.S.-Mexico trade policies, global economic conditions, and central bank actions. Investors and traders should remain vigilant, considering both macroeconomic indicators and geopolitical events when making decisions related to the MXN/USD currency pair.