Analysts are downgrading their year-end forecasts after the Mexican peso underperformed all other major currencies in the past month. The peso has fallen by nearly 6% this month, and its performance is weaker than all currencies tracked by Bloomberg when the Federal Reserve raised interest rates and the Bank of Mexico kept interest rates unchanged thereafter. Société Générale, Morgan Stanley, and Banco Base have all lowered their forecasts for the peso. Some strategists say “the arbitrage party is over,” and the peso's “arbitrage story is losing its appeal.”

Analysts are downgrading their year-end forecasts after the Mexican peso underperformed all other major currencies in the past month. The peso has fallen by nearly 6% this month, and its performance is weaker than all currencies tracked by Bloomberg when the Federal Reserve raised interest rates and the Bank of Mexico kept interest rates unchanged thereafter. Société Générale, Morgan Stanley, and Banco Base have all lowered their forecasts for the peso. Some strategists say “the arbitrage party is over,” and the peso's “arbitrage story is losing its appeal.”