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John Shrall

Peso Closes at a New Low Against USD July 17

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It looks like $16.26 this weekend. If I were there, I would be visiting ATMs.

So, after Visa gets their share, what will be left?

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So, after Visa gets their share, what will be left?

More than you would have gotten last week. Or the week before that. Or several months ago. Or not-that-many years ago when it was at 9.5.

I think that's the point of this thread.

Or was.

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More than you would have gotten last week. Or the week before that. Or several months ago. Or not-that-many years ago when it was at 9.5.

I think that's the point of this thread.

Or was.

More than you would have gotten last week. Or the week before that. Or several months ago. Or not-that-many years ago when it was at 9.5.

I think that's the point of this thread.

Or was.

It is the point of this thread. I've been here 10 years and I don't think I've ever seen 9.5, so when was that?

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You only have to look on the VISA website to know exactly.

I have been unable to find it. Can you provide a specific location? TIA

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If you ever paid the exchange rate at a cuota caseta or at a bridge crossing to Texas you could have seen 9.5, but not likely anyone ever got 9.5 at a financial institution.

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I've been here 10 years and I don't think I've ever seen 9.5, so when was that?

I seem to recall the dollar toileting in the spring of 2008, shortly after I moved here. Quick search found this on x-rates.com:

Mar 26, 2008 16:00 UTC Mexican Peso 1.00 MXN inv. 1.00 MXN US Dollar 0.093527 10.692082

But I don't really understand exchange rates and shouldn't have cited a specific number. It's also very possible I've joined the swelling ranks of the Ajijic Senility Guild. :lol:

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If you ever paid the exchange rate at a cuota caseta or at a bridge crossing to Texas you could have seen 9.5, but not likely anyone ever got 9.5 at a financial institution.

.

We regularly exchanged pesos at $9.5 back in 2007 - 2008 when we moved here.

That was a very different time. Prices on food & housing were much lower then than now, Remittances sent back from the USA were at least 2X higher, Mexican govt. oil revenues were 2X higher due to high oil prices, Mexico's biggest - Cantarell - fields were still gushing oil from the Bay of Campeche, and the US had not yet discovered/experienced the massive frauds of Wall Street, nor the $$Trillions of Washington bailouts.

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The Visa exchange rate calculator is fu.
We do have to know our bank's added fees and interest rate to add them on, and since banks and merchants hold our transactions for 1 - 3 business days before processing them, the actual rate we get can vary widely from the Visa calculator's prediction. ...
Still, a very useful tool. Thanks.

It's a good comparison to http://www.XE.com/currencyconverter/#'s spot rates for actual exchanges.

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Unfortunately, that is not correct for withdrawing funds from an ATM with a debit card. THAT is the credit card rate. I was hoping you knew. Sorry I bothered you.

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If you ever paid the exchange rate at a cuota caseta or at a bridge crossing to Texas you could have seen 9.5, but not likely anyone ever got 9.5 at a financial institution.

Actually, Kiki, back in the early 2000's, the rate dropped to 8.9. Better rates were at ATMs, but not much.

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For what it's worth the peso hasn't closed below 10 since 2002. It touched 10 perhaps late 2008 before spiking the first time to 15 in 2009. ATM withdrawals and certainly checks and at cambios cleared under 10.

PesoChart.jpg

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So if history is any thing to go by, you would hold minimum pesos and bring down USD as needed..That is our financial planing 101 for this week end..if you need more guidance please send me $1000 usd in cash.

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Which value do we care most about?

The "official" reported value? .... or The cash we got in hand?

Consider Aug. 5, 2008, when the official MXN:USD close was $9.87 459 MXN vs $1 USD ...

Then factor in that almost all banks and brokerage houses charge a 2% fee, or 4% at currency exchanges ... which means the effective real rate that we got from the exchange or bank on August 5 was $9.68 at the ATM or $9.48 or worse at exchanges (casas de cambio).


Why the differences between John's plot and reality?
John points out a limited case for MXN peso values, posting mid-market rates for a single very large trade (not the buy or sell rates we actually pay), and it uses the flukey values of the last single trade "reported" for the end of that day (where one single trade at the end of the day in some far off Wall Street exchange is NOT what we get at the ATM).

Consider the XE.com 's plots, that have been found to be more representative (since XE.com actually does real trading - not just collecting data from other sources). e.g. The US govt. approves XE.com data for IRS tax reporting, while rejecting almost all other sources.

http://www.xe.com/currencycharts/?from=USD&to=MXN&view=10Y

???

Based on counting the cash we got in hand: We regularly only got $9.5 - $10 in actual pesos back in 2007 - 2008 from banks.

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For people doing exchanges, it's worth noting that the Banco de Mexico's rates (the official Mex. Gob. rates) are some of the poorest published rates to use, since the Banco de Mexico uses a "market-basket" of published general exchange values that are processed in a complex formula (that they refuse to divulge) to give an estimate of the previous day's exchange rate.

That means that the official rate that the Mex. Gob.'s Banco de Mexico uses ... is a day old ... and is a calculated estimated value, not based on real trades.

To avoid all this dreck, avoid extra charges and artificially-manipulated rates, my wife and I exchange pesos/dollars with friends at the spot price exchange rates reported on XE.com .

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For the few foreigners and most all Mexicans, who live in the all peso world, the rate of inflation is the number we keep our eye on. So far, so good, and hopefully US imports will slow down , to keep it good. Canadian and European imports is what we should be buying, or for that matter, imports from anywhere, except the US.

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Is it worth an extra $75 - $200 to sit and wait for half an hour?

If we have a large sum of cash to exchange, we can get about ½ point to 1 point better rates by asking our Mexican branch bank manager for the best rate they can offer us for an exchange.

You make the request, and then sit around for about ½ hour waiting for the manager to talk with their exchange-rate officers back in their home office for an approval, but the final custom-quoted rate offered by the bank manager on $$ amounts larger than $2,000 -$3,000 USD is far better than their posted rate, and sometimes even better than XE.com 's rates,

because sometimes the Mexican Banks want US dollars - and will pay better rates than any of the XE.com or other published rates - especially when the Bank's exchange department experts think that the MXN peso value will soon drop - and they want even more US dollars (as a hedge).

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Mexico, even with the current oil price bust that is creating problems for an already problematic Pemex, is still more fiscally sound than the U.S. I have a suspicion here that the government is not really all that upset about this devaluation. It seems to me that if they were, raising interest rates would quickly stop it in its tracks.

When the Cete was paying close to 8 percent the Peso was 10 to the buck.

What am I missing here? Seems the real fix is available whenever they chose to use it.

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Looks like the Mexican central bank has been active the past two days, bringing the exchange rate down to around 16.1. It was near 16,5 on Thursday.

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You can see when the Mexican government intervened in the peso's freefall. They announced they're ready to sell up to $200 million USD every day as needed to prevent the currency from spiraling out of control. At least that's what an article from DailyFx.com says.

PesoChart2.jpg

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It's not that the peso is weak, the US dollar is strong. A chart on XE.com shows that the peso vs. the CA dollar is about where it's always been and the peso vs. the US dollar is going off the chart. A chart of the US dollar vs. CAD looks the same. Only a few years ago the CAD and the USD were at parity but now the CAD is worth .80 of a USD.

If the gub'mint is trying to chase the USD, it might not be a fair race.

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