I just reviewed the movements of USD/MXN over the past few months, and the truth is that the behavior of this pair remains as volatile as expected. Just over a year ago, we made a fairly detailed forecast for the dollar for 2025, and now that we are halfway through 2026, it’s worth reflecting on how things actually unfolded.

The USD/MXN pair reached levels close to 20 pesos per dollar during 2025, something many analysts anticipated. Political uncertainty in the United States was a key factor, along with monetary policy decisions from both the Federal Reserve and Banxico. The interesting thing is that while the dollar remained strong at various times, the Mexican peso faced constant pressure from internal and external factors.

From a fundamental perspective, what impacted the most was the interest rate differential. Banxico continued with its rate cuts during 2025, which naturally weakened the appeal of peso-denominated assets. Meanwhile, although the Federal Reserve also lowered its rates, dollar yields remained more competitive for investors seeking refuge. This reinforces the idea that the dollar forecast depended much more on monetary policy than on other factors.

Inflation in Mexico also played an important role. Despite Banxico’s efforts, core inflation stayed above the 3% target, continuing to pressure the peso. Oil prices, a critical factor for an export-oriented economy like Mexico’s, also experienced significant fluctuations that affected perceptions of stability.

What caught my attention is how the different forecasts circulating at the end of 2024 turned out to be quite varied in their projections. Some analysts expected levels close to 25 pesos per dollar, while others were more conservative. The reality ended up being somewhat intermediate, though with sharp movements at certain times.

From a technical analysis perspective, the USD/MXN pair showed consolidation patterns followed by breakouts, as the indicators suggested. Bollinger Bands were useful for identifying moments of extreme volatility, and the RSI helped detect overbought conditions that generally preceded corrections.

For those trading this pair during 2025, the key was to stay attentive to monetary policy announcements and relevant economic data. The moments of highest liquidity coincided with the release of economic reports in both countries, exactly as expected.

Looking ahead, the outlook remains complex. Political stability in Mexico, changes in commodity prices, and ongoing decisions by central banks will continue to be decisive factors. The dollar forecast against the peso will largely depend on how these dynamics evolve in the coming months.

What’s clear is that USD/MXN will continue to be an interesting pair for those seeking opportunities in volatile markets. The volatility characterizing this pair, although risky, also creates opportunities. For investors considering trading CFDs or specialized currency funds, it’s crucial to maintain a solid risk management strategy and stay alert to macroeconomic events that could impact the relative value of both currencies.