Exchange Rate Calculator

The exchange rate between the Mexican Peso (MXN) and the United States Dollar (USD) is a critical indicator of the economic relationship between Mexico and the United States. Over the past few months, this exchange rate has experienced fluctuations influenced by various economic policies, trade negotiations, and market sentiments. This report provides an analysis of the MXN/USD exchange rate trends, the factors affecting these movements, and forecasts for the near future.

Recent Exchange Rate Trends

As of April 4, 2025, the exchange rate stood at approximately 19.89 MXN per USD. This represents a slight appreciation of the Peso compared to earlier in the year. For instance, on January 28, 2025, the rate was 20.554 MXN per USD. Throughout the first quarter of 2025, the exchange rate exhibited moderate volatility, with the Peso strengthening against the Dollar in March, reaching 19.89 MXN per USD by mid-March.

Factors Influencing the Exchange Rate

Several factors have contributed to the recent movements in the MXN/USD exchange rate:

1. Trade Policies and Tariffs: In early April 2025, the U.S. administration announced new tariffs on Mexican goods. Despite this escalation, the Peso remained relatively stable, partly due to successful negotiations by Mexican President Claudia Sheinbaum, which moderated the initial impact of these tariffs. Analysts anticipate that any new tariffs will be limited in scope and duration, with both governments likely to reach amicable agreements.

2. Economic Indicators: Mexico's economic performance, including GDP growth, inflation rates, and employment figures, has influenced investor confidence in the Peso. Positive economic data has bolstered the currency, while any signs of economic slowdown have exerted downward pressure.

3. Monetary Policies: The interest rate differential between Mexico and the United States plays a significant role in exchange rate dynamics. Mexico's central bank has maintained a key rate of 9.00%, while Brazil's Selic benchmark rate stands at 14.25%. These rates influence capital flows and, consequently, the exchange rate.

4. Global Market Sentiment: Investor sentiment, driven by global economic conditions and geopolitical events, affects demand for emerging market currencies like the Peso. Periods of global uncertainty often lead to a stronger USD as investors seek safe-haven assets, resulting in a weaker MXN.

Forecasts and Outlook

Looking ahead, forecasts suggest a slight depreciation of the Peso against the Dollar. In the next three months, the exchange rate is projected to reach 20.3561 MXN per USD, indicating a modest weakening of the Peso. Similarly, the MXN to USD exchange rate is expected to fall to 0.0492 in one month, a 1.99% decrease from the current rate.

These projections are based on several assumptions:

• Trade Relations: The expectation that any new tariffs imposed by the U.S. will be limited and short-lived, with both countries working towards favorable trade agreements.

• Economic Performance: Continued positive economic indicators in Mexico, supporting the Peso's value.

• Monetary Policy Stability: Maintaining current interest rate differentials without significant policy shifts that could affect capital flows.

Conclusion

The MXN/USD exchange rate has shown relative stability in recent months, despite challenges such as new U.S. tariffs. This stability is attributed to effective trade negotiations, favorable economic indicators, and prudent monetary policies. While forecasts indicate a slight depreciation of the Peso in the near term, the overall outlook remains cautiously optimistic, contingent upon the continuation of current economic and policy trends.