How to Interpret the Dollar Trend in the Coming Days: USD/MXN Projections for 2025

The behavior of the USD/MXN pair continues to show significant complexity heading into 2025. With the US dollar trading around 19.88 Mexican pesos, investors face a critical decision environment marked by changes in international monetary policy and major political events. Understanding what drives the dollar trend in the coming days is essential for those seeking to strategically position themselves in the currency markets.

Structural Factors Determining USD/MXN Movement

The relationship between the two currencies is built on well-defined economic foundations. Decisions by the US Federal Reserve have direct effects on the strength of the dollar, while measures by Banxico directly influence the stability of the peso.

Interest rate policies set the course. The United States maintains a gradual reduction stance — with expected cuts toward the end of 2024 — but its yields will remain competitive, supporting demand for dollar-denominated assets. Simultaneously, Mexico faces a different situation: Banxico has begun its cycle of rate cuts from 10.50%, a move that typically weakens emerging market currencies by making peso investments less attractive.

Beyond rates, bilateral trade plays a decisive role. Mexican exports concentrated toward the US link the peso to US demand, while dependence on energy imports exposes the Mexican currency to fluctuations in oil prices. Cheaper oil prices pressure the peso toward depreciation.

Geopolitical Dynamics and Their Impact on the Quote

The US electoral environment in 2024 projects uncertainty into 2025. Promises of 200% protectionist tariffs on Mexican vehicles are not mere rhetorical statements but signals that reorganize capital flows toward lower-risk assets, primarily reserve currencies like the dollar.

In Mexico, institutional debates around judicial reform have raised questions about the stability of the regulatory framework. This type of institutional uncertainty results in lower confidence among foreign investors, pressuring the peso downward against its US counterpart.

Technical Projections for the Dollar Exchange Rate

Technical indicators offer clues about the direction the dollar trend will take in the coming days. The Relative Strength Index (RSI) stands at 53.42, reflecting a balance point without immediate overbought or oversold pressures. This neutral scenario suggests the pair could experience sideways movements before establishing a clear direction.

Bollinger Bands indicate contained volatility. The price has touched the upper band, signaling recent bullish momentum, but a pullback toward the moving average suggests consolidation. A sustained break above 20.00 would confirm upward continuation, while declines below 19.50 would signal deeper corrections.

The Relative Volatility Index (RVI) at 34.60 reflects a short-term bearish bias. This indicator anticipates corrective pressure if the pair fails to stay above key supports.

Multiple Scenario Forecasts for 2025

Projections from different analysts show significant dispersion. While Longforecast anticipates levels of 21.5 in January rising to 22.63 in December, other sources like Tradersunion maintain more moderate views around 19.20. This divergence reflects the inherent uncertainty of the pair: Mexican GDP growth projected between 1.0% and 1.3% contrasts with expectations of 2.1% in the US, favoring the relative strength of the dollar.

Core inflation in Mexico will remain between 3.7% and 3.9%, above Banxico’s 3% target. This historical inflation differential weakens the peso and justifies long positions in dollars.

Historical Context: Volatility as a Pattern

Examining the USD/MXN trajectory reveals that volatility is an inherent characteristic, not an exception. From the devaluations of the 1980s to the impacts of the COVID-19 pandemic, the pair has experienced large movements. Oil prices have always played a central role: the 2014-2015 decline severely impacted due to Mexico’s fiscal dependence on crude. This dependence remains today, making OPEC decisions directly resonate in the quote.

Concrete Trading Strategies: When and How to Act

For those trading CFDs on regulated platforms, the trading window opens when technical indicators align with economic catalysts. Sustained buying is justified if the price breaks 20.00 without RSI reaching overbought territory, especially if Banxico confirms further rate cuts.

Exits should be executed if RSI exceeds 70 — signaling bullish exhaustion — or if supports at 19.50 give way with confirmation from the bearish RVI. The Forex market operates 24/5, but concentrated volumes allow traders to capitalize on movements during peak liquidity hours.

Key economic events such as US employment reports, monetary policy statements, or OPEC announcements generate volatility spikes that offer opportunities for active traders, though rigorous risk management is required.

Overall Perspective: Risks and Opportunities

The USD/MXN pair presents a balance between upside risks derived from the economic gap and interest rate differentials between both countries, and downside risks linked to Mexican political stabilization or positive growth surprises. Long-term investors should monitor developments in oil prices and structural reforms in Mexico. Defensive positions make sense if global geopolitical volatility intensifies; bullish positions gain relevance if the rate differential persists.

The dollar trend in the coming days will depend on the peso’s ability to find support at 19.50 or confirm an upward breakout at 20.00. Both scenarios are plausible. What is clear is that 2025 will offer multiple opportunities for those who understand these underlying dynamics and manage positions with discipline.