Mexico's peso will likely strengthen a bit in the coming year, backed by US demand for Mexican exports and global demand for the country's local currency bonds. The peso, Latin America's most freely traded currency, is expected to rise to 13.18 against the dollar in three months and to 12.80 per dollar in a year, according to the median forecast of 18 analysts polled by Reuters.
That 12-month consensus forecast was a bit weaker than 12.73 polled in May, owing in part to concerns about how long the euro crisis will hold back a long-awaited global recovery in trade.
But further monetary stimulus from the United States and European central banks is expected to further depress the paltry yields investors get on fixed-income assets in those countries, driving flows into emerging markets, where interest rates are higher.
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