Mexican Peso Breaks Below 17.00 per Dollar as Banxico Hold Bets and AI Exports Surge
Updated
Updated · mufgresearch.com · Aug 25
Mexican Peso Breaks Below 17.00 per Dollar as Banxico Hold Bets and AI Exports Surge
1 articles · Updated · mufgresearch.com · Aug 25
Summary
USD/MXN fell below 17.00 this month for the first time since June 2024, with MUFG saying the peso has strengthened beyond its earlier expectations.
6.50% policy rates and Banxico minutes pointing to a longer hold have reinforced Mexico’s carry appeal, while Q2 GDP grew 1.4% quarter on quarter and services inflation stayed sticky.
USD 83 billion in Mexican computer-server exports in H1 2026 added another tailwind, with AI-related shipments up 172% year on year in the 12 months to June and 94% going to the US.
Low volatility has helped sustain the trade, with 1-month USD/MXN implied volatility near its lowest since 2019, though leveraged funds’ net long peso positioning is nearing a post-Covid high.
MUFG argues that, despite broader fears of US fiscal strain and dollar debasement, history favors dollar stabilization and continued outperformance by high-yielding emerging-market currencies while yields stay elevated.