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 **U.S. dollars** and covers the **Q4** period.
Mexico’s **Q4 2025** current account surplus came in at **$7.7 billion**, below our expectation of **more than $11.5 billion**. This means less foreign currency entered the country than expected, which is a negative for the peso. This downside surprise may weaken market sentiment toward the **MXN** in the coming weeks.
Because of this, we are considering strategies that may benefit from a weaker peso, such as **buying USD/MXN call options**. The peso has been strong recently, trading around **17.50 per dollar**, mainly because Mexico’s rates remain much higher than U.S. rates. This weaker-than-expected report could be the trigger that pushes **USD/MXN** higher, potentially toward **18.00**.
This also makes the outlook more difficult for **Banxico** ahead of its **March** meeting. Inflation in **January 2026** remained sticky at **4.5%**, but this weaker external signal could push Banxico toward a more dovish message. We will watch **interest rate swaps** for signs that the market is repricing the path for rate cuts this year.
The miss likely reflects a weaker trade balance, possibly tied to the slowdown in **U.S. manufacturing** seen in January’s data. Even with strong remittances—over **$63 billion** in total for **2025**—it was not enough to reach the higher surplus forecast. This may be an early warning sign for the export-led growth narrative.
This surprise increases uncertainty about where the peso goes next. If the direction is unclear, a way to express that view is to **buy volatility** using options such as **straddles**. This strategy can profit from a large move in **MXN** in either direction as markets digest the data.
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