Mexico’s current account balance rose to $7,702 million quarter-on-quarter in Q4. This was below the expected $11,520 million.
The reported balance missed the forecast by $3,818 million. The figure is in US dollars and covers the Q4 period.
The fourth-quarter current account surplus for 2025 came in at $7.7 billion, below our expectation of more than $11.5 billion. This means less foreign currency flowed into Mexico than planned, which is a negative for the peso. This miss could also weaken market sentiment toward the MXN in the coming weeks.
Based on this, we are considering strategies that may benefit from a weaker peso, such as buying USD/MXN call options. The peso has been strong, trading near 17.50 per dollar recently, helped by Mexico’s higher interest rates versus the U.S. This weaker report could be the trigger that lifts the exchange rate toward 18.00.
This report also makes the outlook harder for Banxico ahead of its March meeting. Inflation in January 2026 was still high at 4.5%, but this weaker signal for external demand and growth could push Banxico toward a more dovish message. We will watch interest rate swaps for any shift in pricing of rate cuts later this year.
The weakness likely reflects a softer trade balance, possibly tied to the slowdown in U.S. manufacturing seen in January’s data. Remittances were still strong—above $63 billion for all of 2025—but they were not enough to reach the higher surplus forecast. This may point to early stress in the export-led growth story.
This surprise adds uncertainty around the peso’s next move. For investors without a clear directional view, buying volatility through options such as straddles may be sensible. This approach can profit from a large MXN move in either direction as the market absorbs the news.
here to set up a live account on VT Markets now
