Barclays expects a firmer Mexican peso against the U.S. dollar by year-end, publishing a USD/MXN forecast of 17.25. The bank attributes this outlook in part to initial progress in the review of the United States-Mexico-Canada Agreement (USMCA), which it says could help restore investor confidence and spur investment if the talks provide earlier clarity.
In its assessment, Barclays emphasizes the peso's close correlation with global risk sentiment, suggesting it is likely to be among the first emerging-market currencies to rebound should the conflict in the Middle East show signs of de-escalation. The bank judges higher oil prices to be broadly neutral for Mexico's current account position.
Barclays also considers the implications for domestic monetary policy. The firm expects Banco de México to moderate a dovish stance as rising energy costs feed into inflation, particularly in an environment where other major central banks are shifting toward tighter policy. While noting a potential downside scenario, Barclays states that a prolonged energy shock - if gasoline tax changes effectively turn into subsidies - could worsen fiscal metrics. Nonetheless, the bank does not anticipate this fiscal stress will translate into meaningful pressure on the currency.
The USMCA review, Barclays notes, began in early March, ahead of the formal July 1 start date. The bank describes this early initiation as constructive, arguing that earlier certainty around trade policy might help revive investment and economic growth in Mexico. Barclays further indicates that headline risk tied to the USMCA negotiations is not viewed as a prominent driver of peso moves, observing that markets appear to have become relatively immune to that category of uncertainty.
This analysis frames Barclays' baseline for the peso through the lens of trade developments, risk sentiment, energy price trajectories, and likely central bank responses, without assigning weight to a scenario in which fiscal deterioration meaningfully drags on the currency.