Peso Bolstered

The Bank of Mexico has intervened to prop up the declining peso. I wondered if it had much effect.

Looking at the rate for the month we see that yes there was a slight increase in the value of the peso both against the Canadian dollar

Peso Rate Chart

and the US dollar.

Peso Rate Chart

However looking at it on a 2 year basis both currencies are still historically high for the Canadian

Peso Rate Chart

and the US dollar.

Peso Rate Chart

Someone mentioned to me last week that they remembered when there was even less than a 10 to one ratio. I did not remember that but the 10 year rate graphs tell the story clearly for both the Canadian

Peso Rate Chart

and the US Dollar.

Peso Rate Chart

For those of you Canadians feeling a bit blue about the weak C$ take heart it has come back before. The chart does not show it but I remember the 65 cent Loonie back in the 90s because I had a manufacturing company selling mostly in US$ to Japan and the US. That was delightful and illustrates the up side that Mexico also has with a weak peso.

Peso Rate Chart

Additional Resources:

Thanks to xe.com for the graphs.

There were two recent aarticles in Mexico News Daily that piqued my interest:

Bank of México hikes rate to support peso
Federal spending cuts of 132 billion pesos also announced this morning

Mexico News Daily | Wednesday, February 17, 2016
A surprise interest rate hike and spending cuts were announced this morning to address the decline in value of the peso and reduced petroleum revenues.

– See more at: http://mexiconewsdaily.com/news/bank-of-mexico-hikes-rate-to-support-peso/

AND

Peso does about-turn after bank responds
Bank of México announces increased support, peso jumps 1%

Mexico News Daily | Saturday, August 1, 2015
The peso shot up 1% yesterday to 16.1088 to the U.S. dollar after the Bank of México announced it would increase its daily dollar sales and auctions to buy more pesos.

It was the strongest the peso has been since May 14; on Thursday it had dropped to 16.81 to the dollar.

– See more at: http://mexiconewsdaily.com/news/peso-does-about-turn-after-bank-responds/

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