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Mexican Peso Stronger !


snowyco
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There are several drivers that  may  cause the MXN peso to get even stronger over the coming year.
 

That also means .... with a new NAFTA agreement just approved by the US Senate ... and the Phase 1 of the US-China trade agreement just signed ... it's possible that the US economy should finally do better.

As the US economy does better, it buys more from Mexico ... and sends more goods to be manufactured in Mexico ... and the 45% US-content in Mexican exports back to the USA ... then BENEFITS BOTH USA & Mexico ... !!!

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Because Mexican goods exported to the USA have 45% US made content ... it means Mexico is  the USA's best trading partner - because both countries benefit from increased US consumption & US imports from Mexico ... potentially increasing MXN peso strength (as Mexican growth has been stagnant during the USA's Trade Wars). ;)
 

Next ... II the cross-border trade springs back to     life-before-Trade-Wars    aka  busy-ness ... and if US & Mexican commerce increases and economic growth heat back up to pre-Trade War levels ... Those changes would drive up oil consumption, driving NYMEX crude oil prices over $70 a bbl. => a stronger MXN peso.

Then ... as both US & Mexican commerce increases and    economic growth heats back up to  pre-Trade War levels ... It will drive  more Mexicans working in the USA ... to fill the new jobs created by a  finally growing  US economy => $10 of billions of more remittances of Mexican workers in the USA sending cash back home to Mexico => driving the MXN peso even stronger.


And ...  US consumers, buoyed by fresh confidence by  finally   returning to economic growth - start buying even more products Made in Mexico - driving yet even more Mexican prosperity,  would drive the MXN peso stronger.

Finally  ...  because Mexico imports 45% of her food from the USA (corn products, sugar & $10's of billions as US taxpayer subsidized cheap ag USA products) ... the 45% of ALL food bought by Mexicans comes from the USA could become cheaper - freeing up Mexican consumers' pesos to buy yet other goods => yet more Mexican economic growth => stronger MXN peso.


but ... Who knows ???
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... Just how long is a piece of string ?? 

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The Guad Reporter says is will be a problem for auto makers to pay Mexican workers $16/hr(by 2023) and goes on to say the average auto workers pay is $2400p/day. At current exchange rates, that is over $16/hr for an 8 hour day, or almost $13/hr for a 10 hour day. Was there misinformation in that article or is this accurate?

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Just now, tomgates said:

The Guad Reporter says is will be a problem for auto makers to pay Mexican workers $16/hr(by 2023) and goes on to say the average auto workers pay is $2400p/day. At current exchange rates, that is over $16/hr for an 8 hour day, or almost $13/hr for a 10 hour day. Was there misinformation in that article or is this accurate?

My read on the new NAFTA deal was in order to placate the US Labor Unions a certain % of the MX labor had to be paid $16/hr

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