Usdmxn: Banxico Ends Easing Cycle

Banxico has ended its interest rate easing cycle at 6.5%, aiming to stabilize inflation despite a downward revision of Mexico's 2026 GDP growth to 0.8%. UBS maintains a resilient outlook for the Mexican peso, forecasting a long-term trend around 17.2 per USD.

Key Takeaways

• 1.Banxico has concluded its easing cycle, setting the policy rate at 6.5% and signaling a steady stance for an extended period.
• 2.Mexico's 2026 GDP growth forecast has been revised down to 0.8% from 1.4% due to trade policy uncertainty and weak private investment.
• 3.The USDMXN is expected to trade near 17.5 in 3Q26, strengthening slightly to 17.2 through 2Q27.

Table of Contents

• Key drivers
• Risks to our view
• Factors to watch
• Appendix

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