Decodingthemarket

(USDMXN) Analyzing the Impact Mexican Peso Depreciation

Long
FX:USDMXN   U.S. Dollar / Mexican Peso
1994-2024 Past Trends and Future Projections
Assessment of Former Mexican Presidents' Management of Peso Depreciation Against the US Dollar

Ernesto Zedillo Ponce de León:
Presidential Period: December 1, 1994 – November 30, 2000
Depreciation Peak: $10.75 USD/MXN
Time to Peak: 1492 days
Summary: Zedillo's term saw significant economic challenges, including the aftermath of the 1994-peso crisis. Despite efforts to stabilize the economy, the peso depreciated considerably during his tenure, reaching a peak of $10.75 USD/MXN.

Vicente Fox Quesada:
Presidential Term: December 1, 2000 – November 30, 2006
Depreciation Peak: $11.70 USD/MXN
Time to Peak: 1249 days
Summary: Fox's administration experienced moderate depreciation of the peso, with a peak rate of $11.70 USD/MXN. His tenure was marked by efforts to improve economic stability and growth.

Felipe Calderón:
Presidential Term: December 1, 2006 – November 30, 2012
Depreciation Peak: $15.56 USD/MXN
Time to Peak: 852 days
Summary: Calderón's term saw a more pronounced depreciation of the peso, reaching a peak of $15.56 USD/MXN. Global economic instability and domestic issues influenced this significant depreciation.

Enrique Peña Nieto:
Presidential Term: December 1, 2012 – November 30, 2018
Depreciation Peak: $22.03 USD/MXN
Time to Peak: 1523 days
Summary: Peña Nieto's presidency experienced severe depreciation of the peso, with the exchange rate hitting $22.03 USD/MXN. Economic reforms and global market conditions contributed to this peak.

Andrés Manuel López Obrador (AMLO)
Presidential Term: December 1, 2018 – November 30, 2024
Depreciation Peak: $25.77 USD/MXN
Time to Peak: 517 days
Summary: AMLO's administration saw a rapid depreciation of the peso, reaching $25.77 USD/MXN, influenced significantly by the economic impact of COVID-19.

Future Outlook: Claudia Sheinbaum (Predicted)
Presidential Term: December 1, 2024 – November 30, 2030
Predicted Peak Rate: $30.00-$34.00 USD/MXN
Predicted Time to Peak: 1126 days or so.
If the current upward trend in peso depreciation continues, an estimate can be made based on historical data from previous presidents. Here's a possible scenario:

Projection for Claudia Sheinbaum's Term

Average Time to Peak: Using the historical data, the average number of days to reach the peak depreciation can be calculated. The average is approximately 1126 days (1492 + 1249 + 852 + 1523 + 517 = 5633 / 5 = 1126.6).
Predicted Depreciation Peak: If the trend continues and considering the impact of recent trends, the peak could potentially surpass previous highs. Estimating conservatively, the peso could reach a new high, possibly around $30 USD/MXN or higher, depending on economic conditions.
This projection assumes that global and domestic economic factors continue to influence the peso similarly to past patterns. However, it is important to note that predictions can be highly uncertain and influenced by various unpredictable factors

The Bars Pattern (in red) is a visual representation of how the price could behave over the next six years. Please note that past performance does not guarantee future results.

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