Exchange Rate Calculator

The exchange rate between the U.S. Dollar (USD) and the Mexican Peso (MXN) has experienced notable fluctuations over the past few months, influenced by various economic and political factors. This report provides an analysis of the recent trends, underlying causes, and future projections for the USD/MXN currency pair.

Recent Exchange Rate Trends

In early 2025, the USD/MXN exchange rate exhibited significant volatility. On January 16, 2025, the exchange rate peaked at 20.838 MXN per USD, marking the highest point for the year. Subsequently, the peso strengthened, reaching its lowest value against the dollar at 19.910 MXN per USD on March 18, 2025. The average exchange rate during this period was approximately 20.448 MXN per USD. (exchange-rates.org)

Factors Influencing the Exchange Rate

Several key factors have contributed to the fluctuations in the USD/MXN exchange rate:

• Economic Growth Forecasts: In April 2025, the Mexican government revised its economic growth forecast for the year to a range of 1.5% to 2.3%, down from the previous estimate of 2.0% to 3.0%. This adjustment reflects concerns over weaker residential investment and ongoing supply shocks. (reuters.com)

• Trade Relations and Tariffs: The escalation of U.S. tariffs has introduced uncertainty into Mexico's trade environment. Despite these challenges, the peso has remained relatively stable, supported by successful negotiations aimed at moderating the impact of U.S. tariffs. Analysts anticipate that any new tariffs will be limited in scope and duration, with both governments likely to reach amicable agreements. (reuters.com)

• Monetary Policy: The Bank of Mexico's monetary policy decisions, particularly regarding interest rates, have played a crucial role in influencing the peso's value. The central bank's stance on rate adjustments in response to inflation and economic growth indicators continues to be a significant factor affecting the exchange rate.

Future Projections

Looking ahead, various forecasts provide insights into the potential trajectory of the USD/MXN exchange rate:

• Short-Term Forecasts: Analysts predict that the peso will maintain relative stability in the coming months. For instance, a Reuters poll indicated that the peso is expected to trade at around 20.55 per USD in six months, reflecting a marginal depreciation from its current level. (reuters.com)

• Medium-Term Forecasts: Projections for the end of 2025 suggest a slight weakening of the peso. According to some forecasts, the exchange rate could reach approximately 20.80 MXN per USD by the end of the year. (reuters.com)

• Long-Term Forecasts: Longer-term projections indicate a gradual depreciation of the peso. For example, forecasts suggest that the exchange rate could average around 21.8852 MXN per USD over the next five years and 23.2085 MXN per USD over the next ten years. (midforex.com)

Conclusion

The USD/MXN exchange rate has been influenced by a complex interplay of economic forecasts, trade relations, and monetary policies. While short-term projections suggest relative stability, medium- to long-term forecasts indicate a gradual depreciation of the peso against the dollar. Stakeholders should closely monitor developments in economic policies, trade negotiations, and global market conditions, as these factors will continue to shape the dynamics of the USD/MXN exchange rate.