(Bloomberg) — Mexico’s upcoming trade talks with the US and Canada could help the peso — a top emerging-market performer this year — reach lofty heights last seen in 2024, according to the currency’s top forecaster.

There’s a “lot of upside for Mexico” ahead of a review of the United States-Mexico-Canada Agreement, slated for next year, said Jason Schenker, president at Prestige Economics. A refreshed pact could boost investor confidence and bolster demand for Mexican exports, which supports the peso.

The currency surged on Wednesday following comments from President Claudia Sheinbaum about trade talks with the US.

A positive trade deal could push the peso to 17 per dollar in the next year and a half, Schenker said. That would represent gains of more than 7%, bringing it to a level not seen since mid-2024. He sees the currency ending the year at 18.35, largely in line with the current exchange rate.

Schenker oversees forecasts at Prestige, which topped Bloomberg’s ranking of FX prognosticators for a second quarter in a row in addition to being the best predictor for the peso.

The currency has gained 10% since April 2, beating most emerging-market peers amid optimism around Mexico’s prospects in President Donald Trump’s trade war. The country’s exports to the US rose 8% annually as of July, and it faces lower tariffs than other US trade partners thanks to USMCA, according to Deutsche Bank AG research.

The peso has also been helped by a strong domestic economy with low unemployment, according to Schenker.

While questions remain around transshipments — when goods are rerouted through lower-tariff countries — Schenker said “Mexico’s going to be a very big winner” when the trade pact is renegotiated.

The peso “is artificially weak” right now, he said. “We’re in a holding pattern.”

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