Exchange Rate

[SunFan]

Looks like the Mexican peso has somewhat recovered again at the US and Canadian dollar. Anyone know whats happening?

SunFan

[Jreboll]

I thought I had a handle on this but there’s so much market manipulation going on that it’s impossible to know the reasons.

[Mostlylost]

As oil continues to recover so will the  peso.  

[Fred Habacht]

Mexico has admitted to doubling it's purchases of currency to help the peso hold below 23-24. They currently are awash in USD so they can do this for a long time.

[utilitus]

Yes, currency is not only the largest but also the most complex market, like twenty Keynesian 'beauty contests' being run simultaneously, where one or another can motivate a large move for a day or two and then the subject suddenly and usually inexplicably changes...

- 'Emerging Market' currencies are often difficult/expensive to actively trade; but the MXN, because it floats and has long 'association' with the US, has been said to serve as a proxy for EM currencies generally, which prosper as the USD declines, as the world economy stabilizes.  Sure beats the Brazilian Real, which is getting slaughtered as the fascist darling president of international investors fails on every front.

- 4% interest paid (rollover or "carry") on USDMXN.

- There is some speculation that Mexico and maybe something like the maquiladoras might replace supply chains displaced from the PRC.  (S/SE Asia seems more likely, as Chinese firms themselves branch out, even into India.)

-  I attempt to keep a healthy MXN position at all times (for the carry and to pay for my planned house Lakeside), but I have recognized that you really have to day-trade the effing thing because capitalist mechanisms such as forex are all about what Marx called 'reproduction', i.e., capital begetting more capital, not necessarily for any human purpose or benefit.  Worldwide, central banks themselves are now reduced to issuing massive 'papal indulgences' to paper over the failure of such artificial late-capitalist financialization.