The Mexican peso’s strong performance from 2020 to 2024 earned it the nickname “superpeso.” During this period, USD/MXN bears struggled to maintain momentum. In 2026, however, they regained the upper hand. Let’s examine what drove this shift and develop a trading plan.
The article covers the following subjects:
Major Takeaways
- The peso remains one of the favorites in the Forex market.
- The carry trade is supporting the USD/MXN bears.
- Capital is gradually flowing back into Mexico.
- Short positions on the USD/MXN can be considered with targets of 16.7 and 16.4.
Monthly Fundamental Forecast for Mexican Peso
In early 2025, markets and the Bank of Mexico were writing off the peso, expecting it to weaken against the US dollar. Instead, the USD/MXN pair has plunged by 20% since then, making the Mexican peso one of the best-performing currencies in the Forex market in 2026. The “superpeso” is making a comeback, driven by several factors.
The main driver is widely seen as a weaker US dollar. The greenback is receiving little support from elevated Treasury yields. As a result, the MSCI Emerging Markets Currency Index is on track for its strongest quarterly performance in more than a year, while Bloomberg’s Treasuries Index is heading for a quarterly decline. This has pushed the correlation between the two indexes to its lowest level since 2022.
USD/MXN bears are also benefiting from the interest-rate differential and the carry trade. While Mexico’s borrowing cost stands at 6.5%, the US rate is just 3.75%. Although Banxico has refrained from tightening monetary policy for a second consecutive meeting amid slowing inflation, it may have to resume rate hikes by the end of 2026. Consumer prices could accelerate because of the conflict in the Middle East, while the need to keep pace with the Fed’s monetary policy could force Banxico to act decisively.
Banxico Key Rate and Mexican Inflation
Source: Bloomberg.
Against a backdrop of low volatility, wide interest-rate differentials, and strong global risk appetite, carry trades have been a motherlode this year. Trading the interest-rate spread across eight major emerging-market currencies since the end of 2024 has generated a 22% return. By comparison, US Treasuries returned 5.9%, emerging-market government bonds 14%, and emerging-market corporate debt 10%.
Carry Trade Efficiency
Source: Bloomberg.
Mexico is often cited as a major beneficiary of the AI boom. According to S&P Global estimates, exports of computer servers reached $83 billion in the first half of 2026. UBS Global Wealth Management cites lower trade risk premiums, political stability, and strong macroeconomic conditions as the main drivers behind the surge in USD/MXN quotes.
When Claudia Sheinbaum took office in 2024, many long-term investors, including pension funds and insurance companies, turned away from the peso. They doubted the new president’s competence. As a result, the USD/MXN soared 30% by early February 2025. The new head of state’s successes led to the return of institutional investors, which boosted the Mexican peso.
Monthly USDMXN Trading Plan
The main risk factor is a potential trade war between the US and Mexico. If tensions do not escalate, the USD/MXN could resume its downtrend. As a result, short positions can be opened on pullbacks with targets at 16.7 and 16.4.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of USDMXN in real time mode
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