Mexico: Mexican peso falls to lowest level since November 2010
September 1, 2011
On 31 August, the Mexican peso (MXN) traded at 12.34 per USD, which represented a 5.3% depreciation compared to the 11.73 MXN per USD observed at the end of July. However, the weakest reading in the month was recorded the previous day when the exchange rate reached 12.48 MXN per USD, which marked the lowest rate since November 2010. Capital inflows from advanced economies looking for higher rates of return in emerging markets underpinned the appreciation of the peso in recent years. However, turmoil in financial markets during August and its associated flight to safety prompted currencies in most developing economies to depreciate, while currencies and assets regarded as safe havens - such as the Japanese yen, the Swiss franc or gold - rose to new record highs. With the Central Bank turning more dovish, even suggesting it might consider an interest rate cut in case the situation deteriorates, the peso is likely to make a muted recovery in the months ahead.