In December, Mexico’s consumer confidence index rose to 44.8, up from 44. This indicates a slight increase in how households feel about the economy compared to last month. In other news, updates on the market included changes in currency pairs and precious metals. The EUR/USD pair faced pressure, while the GBP/USD struggled to keep its earlier gains. Gold experienced a dip from a weekly high, but it still held on to some gains. Additionally, Bitcoin and other cryptocurrencies cooled down after recent rises.

Investment Disclaimer

FXStreet noted that all information provided is not investment advice. This content serves informational purposes only, and anyone thinking about investing should do their own research. It’s important to remember that investing in open markets can be risky, including the possibility of losing all your initial investment. The rise in Mexico’s consumer confidence to 44.8 is noteworthy. This small improvement, alongside strong nearshoring investments seen throughout 2025, suggests that Mexico’s economy is showing solid strength. This could mean more stability for the Mexican Peso (MXN) in the next few weeks. This sets a strong base, especially with data on foreign direct investment. In the last quarter of 2025, investments in Mexico’s manufacturing sector, driven largely by companies moving their supply chains, increased by over 5% compared to the previous year. This influx of capital helps shield the Peso from outside economic shocks. Central bank dynamics are now crucial. While the Fed is hinting at significant rate cuts of more than 100 basis points for 2026, we anticipate Banxico will be more careful, as Mexico’s inflation finished 2025 at a high 4.4%. This growing interest rate gap favoring the Peso could attract carry traders and further support the currency against the US Dollar.

Consideration of Mexico Focused Investments

Considering this outlook, we are looking at buying call options on Mexico-focused ETFs like EWW. This approach allows us to take advantage of potential gains from a strong domestic economy while keeping our risk limited. The options market currently shows low volatility, making it a good time to enter. However, we need to stay cautious about spillover effects from the United States, as important US labor reports are coming out soon. Any significant downturn in the US job market could reduce demand for Mexican exports. To protect against this risk, we are exploring short-term put options on the USD/MXN currency pair. Create your live VT Markets account and start trading now.

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