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Peso Rate Alert


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As of Tuesday 7am  (12:00 UTC), the Peso (MXN) is trading about 20.3 per US Dollar (USD). Reason probably is recent announcement:

  • Trump may be moving quickly towards separate bilateral talks with Canada, Mexico
  • Separate talks with Canada, Mexico may help NAFTA talks move more quickly
  • Expects to hear a response from Canada on possible bilateral talks later
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The news on NAFTA is more likely affecting the peso today.  The US is awaiting a reply from Canada from Kudlow's phone call yesterday on whether Trudeau will agree to abandon NAFTA and replace it with a separate US-CAN trade deal.  No word on whether the US called MEX last night.  

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9 hours ago, Ajijic_hiker said:

I was told that the AMLO win would mean the peso would drop to 22 to 1.

I was told to expect 25 to 1 by election day. Don't buy yet ! :D

 

 

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There's a broader swing away from emerging market currencies. Brazilian real, Turkish Lira, South African Rand, and many others have been notably weak in recent months. Eurodollar liquidity is drying up (e.g. it's harder for foreigners to borrow USD) and at this point in the cycle, global investors are beginning to be concerned about emerging markets. I have no idea where the peso is going, but my guess is that broader emerging market currencies could continue to weaken, and this will continue to pressure the peso. 

As for Mexico specifically, it is at the mercy of the Trump administration, whether we like it or not. Mexico has a relatively weak negotiating hand and Trump knows this. So whatever negotiations end up for NAFTA, it's perfectly reasonable to expect that Mexico won't get as good a deal as it had. 

All that said, if you're living in Mexico you have a continuing need for pesos, so if you buy some here, and it goes lower, you can still spend the pesos you've bought. If I were living in Mexico (which I'm not currently) I'd be thinking of buying a month or two's living expenses worth of pesos today, and then watching closely. As long as you're not planning on converting the pesos back into USD, you'll be fine even if the peso continues to drop. 

My two cents as someone who used to work in equity investments. (But not in forex)

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By the way, you can get a quote on the Mexican Peso and a chart by going to finance.yahoo.com and typing MXN=X into the search box. A chart is a good way to see where the exchange rate has been and where today's rate fits into the range. 

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i am buyer when i can anything over 20.moving more serious money to pesos this week

i do not have a crystal  ball, but i see mexico as a stable country and peso should be a 15 to 16 in about four years. and interest rates back to 6 or 7 to stimulate the economy

buy pesos when pesos weak

i live here and spend pesos and get over 7.5 interest on my pesos, beat US interest rates.

 

yes they could go to 21.9 again. but happy at anything over 20

 

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The last time it almost and finally did I think actually reach 22, I waited too long. I was too greedy. Now I have a US dollar account at Actinver in a brokerage account and as the peso goes up I buy some pesos every time it gets a little higher. I think it's about time for all of us to bring dollars into Mexico and begin buying even more Mexican pesos

Good luck all. Just don't be too greedy like I was last time when I missed the opportunity to take advantage of the last great exchange rate. 

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A factor that hasn’t been mentioned is the strength of the dollar. The dollar index had been dropping until the beginning of the year, then in April it started rising. Now it seems to be loosing steam.  NAFTA, tariffs and dollar strength all seem to be factors here. AMLO is somewhere down the list 

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2 minutes ago, Jreboll said:

Dollar index is 93.6 this am. It almost hit 95 last week. If the dollar weakens more we should expect the peso to stop falling

The most common 'dollar index to which you refer, the DXY, is composed of a basket - "Currently, this index is calculated by factoring in the exchange rates of six major world currencies the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc."  The euro comprises about 57%.  The influence (as distinct from correlation, you'd suppose) of EM currencies on the DXY and vice versa is probably small.  Bloomberg  offers a competing dollar index, the BBDXY, which some say has both a stronger statistical basis and wider international scope than the DXY.   MXN used to respond mainly to the price of oil, but now Trump is doing laps in the septic tank.  

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1 hour ago, Mainecoons said:

I haven't seen that estimate anywhere.  Source?

 

From a bench in Chapala Centro. 3 guys on the bench, I think his name was Larry, but not positive.  Had a "pony tail" :D

 

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