USD/MXN Forecast: Mexican Peso Remains Under Pressure Following Jackson Hole

The Mexican peso has experienced weakening momentum as USD/MXN gained roughly 0.57% across four trading sessions, driven by renewed strength in the U.S. dollar following hawkish commentary from Jackson Hole. Federal Reserve rhetoric highlighted persistent inflation above the 2% target and resilient labor conditions, shifting market expectations toward a potential rate hike. According to CME Group estimates, the probability of a benchmark rate increase to 4.00% at the September 16 meeting surged past 66%, up from prior expectations of an unchanged rate. This shift propelled 10-year U.S. Treasury yields to new 2026 highs near 4.8%, enhancing the relative appeal of dollar-denominated assets. Although Mexican government bonds offer yields around 9.2%, their stability combined with rising U.S. yields has diminished the carry advantage of the peso. Technically, while a broader multi-month bearish trendline continues to dominate the USD/MXN chart, momentum indicators like the RSI and MACD reflect a developing short-term bullish bias. Key levels to monitor include resistance at 17.28, the pivot barrier at 17.10, and multi-year support down at 16.83.