Oil is a key risk to MXN sentiment

Investors cited lower oil prices as the main downside risk to the MXN, although the majority expect crude to end the year close to current levels. 

Some investors see the volatility of oil as more important than price in terms of the impact on MXN sentiment.

Lower oil prices raise concerns that foreign direct investment (FDI) related to energy reform may stall. 

Based on current government forecasts, the increase in annual FDI could be as high as USD 10bn per year for the next four years. 

For comparison, Mexico attracted USD 35.2bn of FDI in 2013 (of which USD 13bn was a single investment in the brewing industry).