Mexico seems to have decent fundamentals overall, and its major economic indicators are healthy. It remains a relatively cheap country in terms of average GDP per capita and hourly wage costs, so local production of goods & services should continue to be strong.
On the negative side, it’s worth noting that Mexico has the second highest economic disparity between extremely poor & extremely rich among OECD countries. However, the main reason why the Peso has been vulnerable in the past couple of years is Donald Trump. When it comes to corporate investment and jobs, his “war” on Mexico has been relentless. He made it one of his main campaign points to return jobs & production from Mexico back to the US. There have already been a couple of blockbuster announcements, the most notable one being Ford scrapping a $1.6bn plant in Mexico and opting instead to spend $700m in Michigan. This all sounds nice and patriotic, however one must also look at the long-term feasibility of such corporate decisions and search the reasons why such seemingly uneconomic plans could be made. Could this be just a clever publicity stunt, or is it a legitimate long-term policy?