BajaNomad

Peso drops

Oso - 8-9-2008 at 09:17 AM

Peso drops 1.2 percent, most in two years

BLOOMBERG NEWS/

ASSOCIATED PRESS

The peso plunged the most in two years amid speculation the central bank will buy dollars to weaken it.

A slide in oil, the country's biggest export, added to the decline and a global rout in currencies versus the U.S. dollar, added to the decline.

"People are unwinding on commodity currencies, and the yield pickup isn't a driving force any more as the dollar gains momentum," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "There's also concern officials may take measures to weaken the peso."

The peso slid 1.4 percent to 10.1567 per dollar from 10.014 on Thursday.

Crude oil prices, at around $115 per barrel on Friday, are close to 8 percent lower versus a week earlier.

This has also led to lower prices for soybeans and copper, eroding Latin America's export revenue.

Colombia's peso led declines in the region. That peso sank 1.8 percent to 1,812 per dollar from 1,780.20.

The dollar soared Friday as concerns about the deteriorating euro zone economy gripped investors and commodities sold off.

The euro fell the most in almost eight years against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy in the region slows.

The euro sank 2 percent to $1.5010 having touched $1.5004, the lowest level since Feb. 27, from $1.5325. In mid-July the euro had hit a record against the dollar at $1.6038.

"There's a real capitulation under way," said David Gilmore, partner at Foreign Exchange Analytics in Essex, Connecticut. "In 24 hours it's gone from $1.55 to $1.50, which is highly unusual. That changes your game plan for the marketplace."

The pound fell below $1.93 for the first time since March 2007 because the Bank of England kept rates at 5 percent on Thursday. It has dropped 2.7 percent this week to $1.9210, its biggest weekly drop in three years.?

rhintransit - 8-9-2008 at 09:37 AM

sign on ISSSTE here in Loreto today...dollar/9 pesos

thebajarunner - 8-9-2008 at 09:46 AM

Once the euro/dollar slide heads our way the peso will not be able to sustain its strength.
The issue is not the Mexican economy, it is the relative strength of the dollar.
And 9 to 1 is a ripoff, pure and simple!

CaboRon - 8-9-2008 at 09:51 AM

Quote:
Originally posted by thebajarunner
Once the euro/dollar slide heads our way the peso will not be able to sustain its strength.
The issue is not the Mexican economy, it is the relative strength of the dollar.
And 9 to 1 is a ripoff, pure and simple!


I am predicting the peso will nose dive ....





CaboRon

bacquito - 8-9-2008 at 10:16 AM

What a ride!! Kinda like a roller coaster.

CaboRon - 8-9-2008 at 10:25 AM

Quote:
Originally posted by bacquito
What a ride!! Kinda like a roller coaster.


Kinda, except the strengeth of the dollar determines our quality of living overseas.

CaboRon

thebajarunner - 8-9-2008 at 11:10 AM

The peso is the tip of the tail of the small dog.

The dollar (whether you like it or not) is the determining factor in peso strength.

Interestingly, in our lifetimes we have seen the dollar stand off the English Pound Sterling, the Frog Franc (that one did not last long), the Japanese Yen and now in a death battle with the Euro.

Each time old US dollar prevails, now the battle is much more in doubt.
And if we don't solve our balance of payments problems. be it Chinese plasma screens or Saudi oil, we may not see the greenback continue at the top of the heap.

joel - 8-9-2008 at 11:45 AM

9 to 1? Sounds like what I would get an airport currency exchange!

The usual commission for changing money at a bank is roughly 5% (though they usually don't make it clear that you're paying so much), which would put the bank exchange rate at roughly 9.6 to the dollar.

Basically, I'm paying an additional commission of 7 to 8% to the Mexican business for the luxury of paying in a foreign currency. Not great, but not robbery. That's how much AMEX charges their merchants in many non-U.S. countries.

DENNIS - 8-9-2008 at 11:59 AM

Quote:
Originally posted by rhintransit
sign on ISSSTE here in Loreto today...dollar/9 pesos


Is that a hospital?

CaboRon - 8-9-2008 at 12:27 PM

Quote:
Originally posted by DENNIS
Quote:
Originally posted by rhintransit
sign on ISSSTE here in Loreto today...dollar/9 pesos


Is that a hospital?


It's the gov't store .... best prices in town .... for tequilla too !!

CaboRon

Cypress - 8-9-2008 at 12:38 PM

The ATM's will make adjustments.:) Push-button cash on demand.:) It all balances out.:D It's funny, but is it funny money?:lol:

hmmmmm

beercan - 8-9-2008 at 01:26 PM

Mexican Pesos to 1 USD (invert,data)
30 days latest (Aug 8)
10.1261 lowest (Aug 5)
9.9166 highest (Jul 1)
10.385

CaboRon - 8-9-2008 at 02:47 PM

Quote:
Originally posted by Cypress
The ATM's will make adjustments.:) Push-button cash on demand.:) It all balances out.:D It's funny, but is it funny money?:lol:


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