Mexican Peso Becomes World’s Worst-Performing Major Currency as Carry Traders Exit

This is a carry-trade unwind story, not a Mexico story: the peso's slide reflects a narrowing rate differential as the Fed moves while Banxico stays put, and the fact that major banks are cutting forecasts signals the move is being treated as structural rather than a blip. The pain lands on carry traders who had crowded into the peso for its yield, and on Mexican importers facing higher costs. Whether Banxico eventually follows the Fed — or holds to protect growth — is the open question that determines if this reverses or extends.