Banco de México has maintained relatively high interest rates compared with the U.S. Federal Reserve, creating a notable yield differential in favour of the Mexican peso.
USD/MXN is down 14.79% this year. Potentially adding fuel to the fire is Banco de México’s private analysts’ poll, showing that most economists now expect inflation to finish higher this year and next year. Core CPI is projected to end 2026 at 4.17%, up from 4.11% in the previous poll.
Still, this carry trades carries risk. Banxico Deputy Governor Galia Borja said the central bank still has room to reduce rates, pointing to weaker consumer spending, and the appreciation of the Mexican peso, which is expected to help contain inflation pressures.
Momentum in currencies like the Mexican peso highlights a wider set of opportunities developing across global FX markets.
BlackBull Markets enables access to exotic pairs such as GBPMXN, GBPTRY, CHFZAR, GBPHKD, EURCNH, and NZDCNH, alongside a range of other emerging market crosses.
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Trading involves risk and may not be suitable for all investors. The information provided in this article is for educational purposes only and does not constitute financial advice. Always conduct thorough research and seek professional advice before making any investment decisions.
