Article History JEL Classification:E32, Business cycles, E43, Interest rates, R15, Regional econometric models.Prior research suggests that the yield spread between long-term and short-term interest rates contains information regarding the likelihood of future recessions. Linkages between the yield spread and regional business cycles in emerging economies have, to date, received little attention. This study employs yield spreads for Mexico and for the United States, as well as a real exchange rate index, as potential predictors of recessions in eight metropolitan economies located in northern Mexico. The results suggest that, in most cases, the United States yield spread provides early warning signals of potential economic downturns, as does the real exchange rate index. Contribution/Originality:This study contributes to the existing literature on yield curves and recession predictability by amplifying the framework to include a currency market measure as well as international interest rate variables. It is one of very few studies that have applied this methodology to border region metropolitan economies.