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makana.gabriel
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Peso takes record dive
Peso takes record dive
WIRE REPORTS
The peso fell to a record low on Friday after a government report showed the U.S. economy shrank the most since 1982 in the fourth quarter.
The peso dropped 1 percent to 14.3333 per U.S. dollar, compared with 14.1848 on Thursday. It touched 14.4484, the weakest ever. The peso has fallen 4
percent this month, the sixth straight monthly decline.
"It's gotten hammered," said Win Thin, senior foreign-exchange strategist at Brown Brothers Harriman & Co. in New York.
"Each day we are hit with new surprises," Omar Martín del Campo of the brokerage Ve Por Mas told The Associated Press. "I have never seen the peso
fall this much. It's historic."
The Banco de México offered $400 million in foreign reserves to try to bolster the battered currency, but no there were no bidders.
Mexican financial markets will be closed Monday, Feb. 2, for the observance of Constitution Day, and the volume of currency trading was also down,
which experts say is typical heading into a holiday weekend.
"In general, peso traders prefer to go long on the dollar before the holiday because Mexico will not defend the currency" on Feb. 2, said Pedro
Tuesta, an economist at 4Cast Inc.
The U.S. economy, the biggest buyer of Mexican exports, shrank 3.8 percent in the final three months of 2008, the Commerce Department said Friday.
But the U.S. Congress is currently debating a stimulus plan that, if passed, could help bolster the Mexican currency, analysts say.
"The peso will probably continue depreciating until the U.S. economic stimulus plan is approved," Mexico City-based brokerage Invex wrote in a report
to clients.
The nation's economy will shrink 2 percent this year, after growing an estimated 1.5 percent in 2008, RBC Capital Markets said Friday.
FAITH sees the invisible, believes the incredible, and receives the impossible!
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Woooosh
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"The Banco de México offered $400 million in foreign reserves to try to bolster the battered currency, but no there were no bidders."
"The peso will probably continue depreciating until the U.S. economic stimulus plan is approved," Mexico City-based brokerage Invex wrote in a report
to clients."
So how low will it go... 16:1 20:1 ?? With no buyers there is no way it can stabilize. Hang on- it's gonna hit the fan!
[Edited on 1-31-2009 by Woooosh]
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
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makana.gabriel
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With this huge purchasing advantage, I am seriously thinking of buying a used VW or something in the interior. CA allows you to drive a MX plated car
as long as you have a MX drivers license.
FAITH sees the invisible, believes the incredible, and receives the impossible!
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sancho
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So prices haven't been adjusted to reflect
the peso drop? seems in the past they
were. I was down last Aug., the peso
was actually gaining against the
dollar, trading at I believe slightly
under 9 to 1. Would a fmt tourist
card be $14 dollars or so?
Interesting thaught, Mex plate
with Mex drivers license
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Bajahowodd
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I also experienced the 9 to 1 ratio last summer. Realizing that it is certainly not the only reason, but having a relative who works as an
international currency trader for a major Wall Street brokerage, I was told something like this:
Just as stockbrokers will "short" stock and bet they will lose value, so do currency traders, betting on the ups and downs of the exchange value. Last
years amazingly high value for the peso was caused in part by a flurry of buying by these traders. When the U.S. economy started to really tank, there
was a massive sell-off of the Peso, as the U.S. is by far Mexico's biggest trading partner.
Government officials, financial institutions and the business press love to pull comments out of thin air about the causes of market fluctuations. But
a significant cause of the fluctuations is the speculative trading for profit, whether up or down by these currency guys. It's like a casino without
the house cut. Oops. In this case it's the brokerages that get the cut. Ever wonder why currency traders make six and seven figure incomes?
Worrisome, however, is that anything more than a short term trend tends to cause panic, and loss of faith, adding to the downward spiral.
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Woooosh
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| Quote: | Originally posted by sancho
So prices haven't been adjusted to reflect
the peso drop? seems in the past they
were. I was down last Aug., the peso
was actually gaining against the
dollar, trading at I believe slightly
under 9 to 1. Would a fmt tourist
card be $14 dollars or so?
Interesting thaught, Mex plate
with Mex drivers license |
Prices are going up in Rosarto Beach restaurants already! The local "Pollo Asil" just plastered a sticker over their old sign raising the family meal
deal from 200 to 223 pesos.
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
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Bajahowodd
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What about the tolls on the Cuota?
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Bob and Susan
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cars $2.10
dually $3.60
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DENNIS
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The prices of imported goods in Mexico will rise as the peso falls. They have to. Domestic items and services, as long as they are free and clear of
dollar influence will remain stable. That's the way it should be anyway.
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Bajahowodd
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So that explains the 10% increase on the family meal deal in Rosarito? In a perfect world, domestic prices wouldn't necessarily rise. But human nature
intercedes. How do I feel if my income or net worth just took a 40% hit? I'd raise the price of the goods or services I sell.
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Bob H
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| Quote: | Originally posted by Bajahowodd
What about the tolls on the Cuota? |
We just got back last week... and on the way down we paid $1.90 for the toll road, a little more at the Ensenada booth.
Most of the places we went to South of Ensenada had not changed their pricing at all. It was very cheap to eat or drink anywhere, especially in
Mulege!!
Bob H
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islandmusicteach
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Has anyone bought construction supplies such as cement block since the currency crashed? I'm curious what a block's going for these days.
- Marko
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Woooosh
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| Quote: | Originally posted by Bob and Susan
cars $2.10
dually $3.60 |
Yesterday my llave was out- so I paid cash. $1.90 (Playas to Rosarito Beach)
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
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Woooosh
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| Quote: | Originally posted by DENNIS
The prices of imported goods in Mexico will rise as the peso falls. They have to. Domestic items and services, as long as they are free and clear of
dollar influence will remain stable. That's the way it should be anyway. |
I thinking Pollo Asil sells only Mexican chickens, beans, tortillas and rice. Don't see much import exposure and the price of some of those items is
regulated by the gov't.
My nephews are actually growing breasts and chest hair at 14 from eating so much hormone laden chicken- so I'm thinking the price increase is "just
becasue they can"- not because they are paying more for Purdue chickens. 
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
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BajaDanD
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what about gas
how has this affected gas prices
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Bajahowodd
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True enough that the government does control prices on a number of commodities. But holding the line on tortillas and petroleum is far from enough.
It's going to interesting to watch a free market conservative such as Calderone as he navigates through this crisis that has only just begun
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DENNIS
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| Quote: | Originally posted by BajaDanD
how has this affected gas prices |
They say gas prices are frozen so, in Pesos, the price won't change but, since we spend and think in dollars, the price will drop.
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BajaGringo
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Actually the tolls are $1.90 at Playas and Rosarito and $2.10 at Ensenada...
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Woooosh
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| Quote: | Originally posted by DENNIS
| Quote: | Originally posted by BajaDanD
how has this affected gas prices |
They say gas prices are frozen so, in Pesos, the price won't change but, since we spend and think in dollars, the price will drop.
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The peso is down 10:1 - 14:1. BUT, the price set for baja was higher per litre than the current price per gallon in San Diego. There has been a
reversal of last summers trend by americans to buy baja gas. Too much math for me but probably come out about even.
\"The only thing necessary for the triumph of evil is for good men to do nothing\"
1961- JFK to Canadian parliament (Edmund Burke)
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Bajahowodd
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Warning!
The CATO Insititute is nominally a think tank populated by libertarian thinkers, but in reality, they are a mouthpiece for big, and I mean BIG
business to alter public opinion, to support deregulation of just about anything. Their largest benefactors are petroleum and tobacco companies.
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