The superweight has impacted the world since the beginning of the year, for continuing its positive streak since 2022. Specialists say that this trend is a response to the combination of factors that have fostered its growth, but that can also put it at risk its current value.
The price of the Mexican currency against the US dollar amazes the international community because, while other international currencies have lost ground, the peso is holding.
In this line, the increase in income from remittances, the rebound in the attraction of foreign investors and the rise in the price of oil, are some factors that could explain its growth.
READ ALSO: “Super peso”: what reasons explain the good performance of the Mexican peso against the dollar?
What is super weight?
The ‘super peso’ is the denomination of the Mexican peso due to its value against the dollar so far in 2023. While the Mexican currency strengthened, other currencies of emerging countries weakened.
According to specialists, some factors that explain its appreciation of 3% against the US currency, is found in the performance of the Mexican appetite for risky assets from the United States.
Other experts point out that the super peso strengthened against the main currencies in the world due to the wide interest rate differential with the United States, the strict fiscal position of the government, the healthy external finances of the country and the high operability of the peso.
READ ALSO: Pemex assumes a high cost with its placement of US$ 2,000 million in bonds
Threats to the super weight
However, the rise of the ‘super weight’ could be seriously affected by a series of events, among which would be the recession in the United States and the increase in the price of oil, among other factors.
Considering that Banco de México has a free floating exchange policy and that the exchange rate moves in relation to supply and demand, any news could affect the appreciation of the currency.
According to, Jose Ignacio Martinez Cortescoordinator of the UNAM Trade, Economy and Business Analysis Laboratory, that the Mexican domestic market is weak.
In dialogue with MIT Sloan, he said that the danger of the United States falling into a recession is not as low as expected.
Regarding inflation, the United States Fed forecasts that by 2023 interest rates will reach a maximum of 5.1%.
Because of these facts, the events that could cause it to be depreciate again the super weight against the dollar are:
- The official announcement of the recession in the United States.
- Increase in the price of oil.
- Formation of the panel on the energy issue in the Treaty between Mexico, the United States and Canada that the neighboring country convenes with the objective of confronting Mexican policies.
- A spike in inflation.
- Drop in remittances.
- Fall of the Gross Domestic Product (GDP) in Mexico.
READ ALSO: S&P believes that the Mexican government will provide timely and sufficient support to the Pemex oil company
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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.
