The exchange rate between the Canadian dollar (CAD) and the Mexican peso (MXN) has shown considerable fluctuations recently, primarily impacted by economic indicators and market sentiment surrounding both currencies. Currently, the CAD to MXN rate is at 90-day lows around 13.31, approximately 2.2% below its 3-month average of 13.61. Throughout this period, the CAD has remained within a stable range of 5.0%, trading between 13.31 and 13.98.
Recent forecasts highlight mixed sentiments toward the CAD due to several influencing factors. The Bank of Canada (BoC) is expected to make interest rate cuts, which analysts believe could lead to further weakening of the CAD. Bearish sentiment has reached a five-month high, driven by disappointing job data and expectations that the BoC is nearing the end of its easing cycle. However, a Reuters poll suggests some analysts forecast a future strengthening of the CAD, projecting an increase against the U.S. dollar, influenced significantly by recovery in oil prices and investor sentiment.
Conversely, the Mexican peso has been supported by higher interest rates maintained by the Bank of Mexico (Banxico), attracting foreign investment despite concerns over potential declines due to U.S. tariff developments and signs of economic slowdown in Mexico. Analysts predict that these factors could introduce volatility, potentially exerting downward pressure on the peso.
The ongoing fluctuations in oil prices, which are currently at 7-day highs near 68.47 — albeit slightly below the 3-month average — emphasize the ongoing link between the CAD and the energy markets. As a major oil exporter, Canada’s economy and, by extension, the CAD can be heavily influenced by trends in oil prices. A rise in oil prices generally strengthens the CAD, while declines could have the opposite effect.
Therefore, currency traders and businesses engaged in CAD/MXN transactions should closely monitor these developments, including interest rate decisions, employment reports, and oil market trends, to navigate the potential impacts on their international transaction costs effectively.
