The Mexican peso, also calledsuper weight”, is the currency of Mexico that surprises the financial community because it has recently shown a promising streak.
While most international currencies have lost ground against the US dollar in recent months, the Mexican currency has benefited from the combination of several factors that maintain investor confidence in the Mexican currency.
To such an extent that the super weight Mexico has become the third most traded currency among emerging countries, with a market share of 7.8%, behind China, which has 36.1% and the rupee India with 8.4%, according to data from the Bank for International Settlements.
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Specialists point out that this sentiment about the Mexican peso remains positive due to an extraordinary entry of dollars to Mexico for exports, remittances, direct foreign investment, tourism and foreign investment in government securities.
However, there are more factors behind it that would explain its good performance.
What reasons explain his winning streak?
The super mexican peso It has increased in value so far in 2023.
Some factors that explain its performance is the appetite for risky assets in the United States, for which reason appreciated 3% against the US currency and is at its best level in three years.
Other analysts agree and give greater importance to the following factors: the wide interest rate differential with the United States, the government’s strict fiscal stance, the country’s sound external finances, high operability of the peso, and mixed macroeconomic and corporate data in the United States.
Meanwhile, some experts point out that the dollar strengthened against the main currencies of the world and when this happened, emerging currencies weakened. However, this time it has been different, because the The central banks of the emerging countries began to raise rates earlier and more rapidly.
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How much is the peso in relation to the dollar?
The super peso, after the stock market opening, the American dollar is negotiated at session startup to 18.85 Mexican pesos on average.
The director of Economic and Financial Analysis of the Banorte, Alejandro Padillaforesees that the exchange rate of the superpeso will oscillate in the year between 18.50 and 21 pesos per dollar, ending at around 20.20 pesos.
In dialogue with Forbes México, he commented that the Mexican peso has behaved much stronger than expected a few months ago, which in the first half will be quite strong, with a level between 19.20 and 19.20 pesos per dollar.
On the other hand, for the second half of the year, it is estimated that the super peso will come under more pressure, especially due to the possibility of a reduction in the differential of the reference rate between Mexico and the United States, for which the exchange rate would reach at between 19.90 or 20 pesos, closing 2023 at 20.20.
READ ALSO: The Mexican peso ends the week at its best level since 2020
What does AMLO say about it?
President Andrés Manuel López Obrador (AMLO) mentioned in recent days that the strength of the Mexican peso remains in relation to the dollar.
“The weight is resisting, (…) it is still superweight”he said during a press conference in Mexico.
AMLO pointed out that the Mexican peso is one of the strongest currencies and is tied with the Swiss franc with an appreciation of 7.6% so far in this six-year term.
Meanwhile, it reported that tax revenue reached an amount of 432,211 million pesos, a figure that, in real terms, is 5.5% higher than that observed in the same period of the previous year, according to data from the Secretariat of Finance and Public Credit from Mexico.
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Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
