Mexico’s Currency Is Having Trouble Coping With The Recession
It would seem that this particular currency has had a rough ride over recent times, as the Bloomberg site has recently reported. You can read the full article at this URL.
As you can see, this is another classic example of thoughts and worries influencing the ability of a particular currency to do well or badly against other ones. In this case it can be seen that the Mexican peso has dropped somewhat in the exchange rates, so let’s see what has happened.
Firstly let’s put it up against the US dollar. Taking figures from the 1st May, the peso was claiming 0.0725 US dollars at that point. It climbed to 0.0765 a few days later and actually enjoyed a reasonable time for a while. The 18th May saw an exchange rate against the dollar of 0.0756, while just twenty four hours later we had an exchange rate of 0.0774. That didn’t last very long though, and before long the rates were starting to drop again.
The week ending the 19th June wasn’t too bad, with a rate of 0.0750 recorded on that day. But even then we can see how much it had fallen against the US dollar since that nice day back in May.
But it has been the most recent results that have really given people cause for concern. These are responsible for the doubts that people have about Mexico and its strength when it comes to digging itself out of the recession that we are currently in. The week ending 3rd July we had an exchange rate of 0.0755. That wasn’t too bad, but things took a turn for the worse the following week with 0.0742 recorded on the 9th and just 0.0730 the day after.
But was this a solo effort against the US dollar? Or were there similar bad results for those couple of weeks against other currencies as well?
Once again we can see an unfavorable pattern for the Mexican peso. On the 1st July we saw an exchange rate between the peso and the Euro of 0.0539. That increased to 0.0542 the following day, before dropping back to 0.0539 to close out the week. But once again it fell sharply on the same days that we had seen a similar drop against the US dollar. On the 8th it was on 0.0534; the day after that fell to 0.0530 and then it was down to just 0.0525 on the 10th.
Things even went badly against the British pound. Now this is a currency that has had a really rough time of it of late, so at least these two currencies can sympathize with each other! But even here the pound had what it took to hold off anything that the peso could muster up.
As it turned out, that wasn’t a lot. The 7th July saw the Mexican peso garnering an exchange rate of 0.0466 with the pound. Just twenty four hours later that had slumped to 0.0462. And once again, it only took another day for it to lose even more ground against the British pound. By this time it was sitting at 0.0456 – and it was only the 9th. As we have seen already, the 10th had seen lower rates for the Mexican peso against two other currencies – and the pound was to prove no exception. On the 10th the Mexican peso could claim only 0.0450, leaving it with a lot of ground to make up.
And judging by the reports to read online at the moment, it could be a while before it could ever hope to regain all that ground, let alone add more on. If we can expect certain currencies to struggle more than others, then it would appear that the Mexican peso falls into this unpopular group.
It will be interesting from here to see how it does over the next week or two. It could continue to fall against the other currencies, but on the other hand it could stabilize. There is little hope for a renewed energy, but who knows? It might happen – eventually.