Usdmxn Will Drop Jp Morgan

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Usdmxn Will Drop Jp Morgan

USD/MXN Will Drop Lower - JP Morgan

The MXN is one of the favorite currencies of JP Morgan from the emerging market currencies. According to the bank, the Mexican Peso will remain supported due to resilient trade flows and improved domestic growth.

According to JP Morgan, the USD/MXN will be near 17.35 by September 2026. By the end of 2026, the pair will be around 17.30. By June 2027, the bank has set a target of 13.70 for the USD/MXN.

Carry Trade Supports The Mexican Peso

The bank added that domestic growth will remain strong in the 2nd half of 2026. Also, the recent economic numbers show GDP growth remains strong.

A strong rebound was seen in services growth and construction activity. So, that will also have a positive impact on the GDP.

JP Morgan added that Banxico is highly likely to keep the interest rate unchanged. So, the interest rate in Mexico will remain near 6.5% in the coming years. As for inflation, it will also remain within the target.

The bank thinks that the USMCA review has also removed a great deal of uncertainty. So, that's also something that will support the MXN in the coming months.

Another factor that supports the MXN is the carry trade. That's one thing that will continue to support the Peso in the short to medium term. After all, Pesso offers a highly attractive yield when compared with the US Dollar.

The MXN's structural view is also very constructive and is driven by the carry trade. Last but not least, the balance of payments is also very resilient.

With all things considered, JP Morgan holds the view that the Peso will continue to attract international inflows. A natural reaction to this will be a bearish trend in the USD/MXN pair.

Meanwhile, the US Federal Reserve is also on hold when it comes to interest rates. However, the yield on the Peso is higher than the US Dollar. So, that will continue to be a dominant theme for the USD/MXN pair.

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