Mexico’s accumulated current account balance rose to 1.6% of GDP in the fourth quarter, up from 0.49% in the prior period.
That is an increase of 1.11 percentage points. These figures measure the accumulated current account balance as a share of GDP.
We view this improvement in Mexico’s external accounts as a bullish signal for the Mexican peso. The end-2025 data suggests the country is in a stronger financial position, which could attract more capital. This supports derivative strategies that position for peso strength versus the dollar in the near term.
This positive фундаментals backdrop adds to the high interest-rate differential that has supported the peso. In 2025, this support strengthened as Banxico kept its policy rate at 11.25%. With USD/MXN already testing lows near 17.05 this month, the current account news could provide the push to break below that key psychological level. As a result, we should consider short USD/MXN futures or buying peso call options.
A stronger current account also changes the outlook for monetary policy by giving the central bank more room to maneuver. Inflation is still a risk, but greater external stability could allow Banxico to deliver an initial rate cut sooner than markets expect. We should look at positioning in TIIE futures for a more dovish shift by the second quarter.
With less uncertainty, we expect implied peso volatility to fall. Last year, implied volatility for 3-month USD/MXN options averaged above 14%, but it could now trend lower. That setup can favor option-selling strategies, such as covered calls or short strangles.
This is not a one-off result. It also shows that nearshoring is delivering real gains. Foreign direct investment in Mexico reached a record of more than $40 billion in 2025, and the current account data suggests this is translating into stronger exports and a healthier balance of payments. This structural shift supports a long-term appreciation view for Mexican assets.
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