(PHOTO: radiozocalo.com)
Mexico’s peso tumbled on Monday June 13 to its weakest in nearly four months, sinking for the third session in a row and trading around levels last seen when Mexico used a surprise interest rate hike to defend its currency.
The peso sank nearly 0.8 percent to 18.78 per dollar, its weakest since Feb. 17, when Mexico’s central bank made an unscheduled rate decision and intervenened directly in the foreign exchange market for the first time since 2009.
At banks in Mexico City Monday morning, dollars were being offered at an exchange rate as high as 19.04 pesos and were being bought for a minimum of 18.24 pesos.
The peso has shed about 3.5 percent in the last three sessions as concerns that Britain could leave the European Union rocked riskier assets around the world.
Mexican assets have been swept up in a global rout of riskier assets as investors braced for a series of international events that could rattle markets including this week’s Federal Reserve meeting and Britain’s referendum on European Union membership in two weeks’ time. The Fed has been debating how soon to raise interest rates again, and how quickly, amid conflicting economic data from the U.S., the destination for most of Mexico’s exports.
“Growth concerns have returned,” said Eduardo Suarez, a strategist for Latin America at Bank of Nova Scotia. “Mexico’s economy is very dependent on trade.”
The peso has already missed out on this year’s emerging-market rally as concern the Fed would raise interest rates has at times damped demand, while at other points speculation that Mexican exports could drop amid slower global growth has weighed on the tender. The peso has lost 8 percent so far in 2016.
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