Goldman Sachs and BBVA Forecast Mexican Peso Strength
The Mexican peso is set to strengthen against the US dollar in the coming months, according to Goldman Sachs and BBVA. The two financial institutions have both released reports forecasting the peso’s strength, citing the US dollar’s recent weakness as a major factor.
US Dollar Weakness
The US dollar has been weakening since the start of the year, with the Bloomberg Dollar Spot Index dropping by more than 4% since January. This has been driven by a combination of factors, including the Federal Reserve’s dovish monetary policy, a weaker US economy, and a stronger global economy.
The weakening of the US dollar has had a significant impact on the Mexican peso, which has appreciated by more than 5% since the start of the year. This has been driven by a combination of factors, including increased foreign investment in Mexico, a stronger Mexican economy, and the weakening of the US dollar.
Goldman Sachs Forecast
Goldman Sachs has released a report forecasting that the Mexican peso will continue to appreciate against the US dollar in the coming months. The report cites the US dollar’s recent weakness as a major factor, as well as increased foreign investment in Mexico and a stronger Mexican economy.
The report also notes that the Mexican peso is likely to benefit from the US-Mexico-Canada Agreement (USMCA), which is expected to be ratified by all three countries in the coming months. The agreement is expected to increase trade between the three countries, which should lead to increased foreign investment in Mexico and a stronger Mexican economy.
BBVA Forecast
BBVA has also released a report forecasting that the Mexican peso will continue to appreciate against the US dollar in the coming months. The report cites the US dollar’s recent weakness as a major factor, as well as increased foreign investment in Mexico and a stronger Mexican economy.
The report also notes that the Mexican peso is likely to benefit from the USMCA, which is expected to be ratified by all three countries in the coming months. The agreement is expected to increase trade between the three countries, which should lead to increased foreign investment in Mexico and a stronger Mexican economy.
Risks to the Forecast
While both Goldman Sachs and BBVA are forecasting that the Mexican peso will continue to appreciate against the US dollar in the coming months, there are some risks to this forecast.
The most significant risk is the potential for the US dollar to strengthen. If the US economy recovers faster than expected, or if the Federal Reserve tightens monetary policy, then the US dollar could strengthen, which would put downward pressure on the Mexican peso.
In addition, there is also the risk that the USMCA is not ratified by all three countries. If this were to happen, then it could lead to decreased foreign investment in Mexico and a weaker Mexican economy, which could put downward pressure on the Mexican peso.
Conclusion
Goldman Sachs and BBVA have both released reports forecasting that the Mexican peso will continue to appreciate against the US dollar in the coming months. The reports cite the US dollar’s recent weakness as a major factor, as well as increased foreign investment in Mexico and a stronger Mexican economy. The reports also note that the Mexican peso is likely to benefit from the USMCA, which is expected to be ratified by all three countries in the coming months. However, there are some risks to this forecast, including the potential for the US dollar to strengthen and the risk that the USMCA is not ratified by all three countries.