In November, Mexico’s trade balance showed a surplus of $0.663 billion, exceeding the expected surplus of $0.5 billion. This difference between exports and imports played a big role in the surprising outcome. The trade balance gives insight into Mexico’s economic activities and trading environment.

Exports And Imports

Exports and imports are essential factors that influence the trade balance. November’s results highlight how these elements are interconnected in trade. This surplus reflects economic activities related to trade in Mexico during this time. Analyzing these figures helps us understand broader economic trends. The strong trade surplus in November is a positive sign for the Mexican Peso. This data confirms the ongoing strength in Mexico’s export sector, a trend we expect to see continue into early 2026. In the short term, it supports speculation that the peso will appreciate against the dollar. This result is not just a one-time occurrence; it aligns with the broader trend of nearshoring observed this year. Foreign direct investment hit a record $42 billion in the first three quarters of 2025, mainly in manufacturing. This trade surplus suggests that investment is leading to increased exports, a trend likely to persist.

Carry Trade And Market Dynamics

With Banxico maintaining a high key interest rate of 10.75% and the US Federal Reserve indicating a pause, the carry trade still looks attractive. Good trade data gives traders more confidence to borrow in dollars to invest in pesos. Recently, the USD/MXN pair dropped below 18.50, and this news may encourage it to test the 18.20 support level. For options traders, this suggests buying peso call options or USD/MXN put options with expiration dates in late January or February. The holiday season often brings lower liquidity, which can lead to exaggerated price movements. Options provide a defined-risk way to profit from a potential sharp rise in the peso, similar to patterns seen in late 2023 when positive holiday data boosted the currency. Selling volatility strategies could also be beneficial but carry higher risk. Selling out-of-the-money USD/MXN call options with a strike price above 19.00 appears to be a sound strategy. This approach can profit from the peso’s strength and rapid time decay over the holiday season. We should keep an eye on US inflation data set for release in the first week of January. If inflation comes in higher than expected, it could shift the Fed’s dovish stance and affect the carry trade. Additionally, a steep drop in crude oil prices could hurt Mexico’s trade balance in future reports. Create your live VT Markets account and start trading now.

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