USD/MXN To Rise to 17.90 in Three Months: Rabobank Mexican Peso Forecast

Rabobank expects the Mexican peso to weaken modestly against the US dollar over the next three months, projecting USD/MXN to rise to 17.90 before stabilizing. The call is driven by fading carry-trade appeal as interest-rate differentials narrow, rising global funding costs, and declining speculative long peso positions. Although the peso has still gained more than 3.5% against the dollar this year, Rabobank sees that support eroding as Banxico is likely to keep rates unchanged at 6.50% amid slower inflation and weaker domestic growth. The outlook remains cautious but not outright bearish versus other emerging-market currencies, with the bank expecting sideways trading after the near-term move higher.