Peso Will Trade Lower After AMLO Sours Confidence

  • Fitch is forecasting that the Mexican peso (MXN) will likely appreciate modestly from spot levels over the coming months, as it modestly pares back losses after a recent sell-off. 
  • Fitch expects the Peso to trade in a lower range after President-elect Andrés Manuel López Obrador (AMLO)'s decision to scrap the construction of a new Mexico City airport punctured investor sentiment.
  • Positive fundamentals, including a rising real interest rate differential, will likely backstop further sell off, as the Peso is now significantly undervalued in real effective terms.   

 Source: Fitch