MEXICO CITY — Mexico’s peso depreciated early on Wednesday Jan. 20 to touch a historic low of 18.478 pesos per U.S. dollar as further falls in oil prices dragged on global markets.
The exchange rate later appreciated to hit 18.361 pesos per dollar at about 7:16 a.m. local time.
Mexico’s peso slumped 16.8 percent in 2015, the highest annual fall since 2008. So far in 2016 it has fallen about 6.6 percent.
Experts attribute the peso’s continuing fall versus the dollar to investors’ being spooked by the relentless sell-off in oil and heightened anxiety over China.
Although investors see Mexico as one of the few solid markets left that can weather the headwinds facing the global economy (as underscored by the resilience in the country’s bond and equity markets), growing enthusiasm about Latin America’s number two economy is being overshadowed by jitters about the broader emerging markets.
And the peso is bearing the brunt of this panic. As the world’s eighth most-traded currency, the Mexican peso is often used by investors as a proxy for less liquid Emerging Markets currencies. This makes it vulnerable to large sell-offs during times of stress as a hedge against long positions in Emerging Markets.
However, the peso’s weakening is not all bad news for Mexico.
A cheaper currency makes Mexico’s exports (80 per cent of which go to the US) more competitive. It also helps keep the country’s energy bill down (Mexico imports a lot of gasoline and gas from the US). These perceived advantages are probably why the country’s policymakers – for all their warnings about looming currency wars – have so far been happy to let the peso slide.
more recommended stories
Fonatur accused of logging more than 144 hectares of forest land for the Tren Maya
MÉRIDA, MX.- Civil associations have joined.
Yacht catches fire on the high seas off the shore of Celestún
The yacht “Juan Pablo” at the.
Mauricio Vila promotes Yucatan during the meeting of governors with the United States Ambassador
Villahermosa, Tabasco, (October 21, 2021) .-.
Greenpeace asks Profepa to investigate alleged illegal planting of transgenic soybeans and corn in Campeche
MÉRIDA, MX.- The international group Greenpeace.
Fossil stuck in 100 million-year-old amber is oldest “true crab” ever discovered
In 2015, two researchers stumbled across.
We still have five weeks left to 2021 hurricane season
The 2021 hurricane season hasn’t been.
Increased feeling of insecurity among Merida residents (INEGI)
Mérida, Yucatán.- Insecurity perception indexes throughout.
FGE arrests two men for child abuse in Yucatan
MÉRIDA, Yucatán, (October 21, 2021) .-.
Agustín Gusto, the first wine produced in Valladolid, Yucatán
Valladolid, Yucatán.- The Agustín Gusto restaurant,.
Mérida’s 2022 municipal budget proposal is ready
Merida will prioritize health services, security.