The Peso in a Positive Momentum

This week we woke up on Monday the 9th with an exchange rate close to 19 pesos per dollar. A quote that very few would have considered possible in the month of January, just when Donald Trump reassumed the presidency of the United States. Today, almost 5 months after having Trump 2.0, we are seeing more than a strong peso, a dollar that is extremely weakened due to the current government’s protectionist policy.

This policy has generated uncertainty and slowdown in the main economy of the world along with renewed inflationary pressures, which creates a lot of noise in the markets around the world, so we ask ourselves: will there only be a recession in the United States or will we see the worst scenario that economists fear, that is, stagflation?

Most analysts in Mexico predict that the psychological level of 19 pesos per dollar could be broken in the coming days, where the highly relevant support of 18.90 pesos would be activated. However, we must bear in mind that on the 26th of this month there is a meeting of the monetary policy committee of Banco de México, in which most analysts take for granted, and the market as well, that there will be a new 50 basis point cut to the national benchmark rate. The above, in a scenario of clear economic slowdown, invites us to strengthen our hedging strategies against possible abrupt reversals of this variable.

If Banxico lowers the reference rate and the Fed in the United States keeps its rate unchanged, we will be in a framework of historical minimums in the interest rate differential. As a reference: the average of the last 12 years of this differential has been 470 basis points and it is expected to close this 2025 at 300 basis points. This allows us to see, coupled with everything related to the tariff negotiations between the United States and the world, that we could soon have periods of volatility with an upward trend where the exchange rate could begin its ascent towards 20.47 pesos per dollar, which is the average year-end closing determined by the analysts consulted in the latest Citi survey.

Let me ask you, if a hurricane season is coming and you live near areas that can flood: wouldn’t you consider having insurance for your cars, home, business, your family? Surely the answer is yes. Now I ask you: wouldn’t it be worth insuring the exchange rate, at least in a percentage of the total of your requirements, that does not cause considerable impacts on your costs if there is a significant increase in this variable?

Exchange rate derivatives | Monex Grupo Financiero