Mexico: Mexican peso rebounds
November 1, 2011
In line with developments expected by Consensus Forecast panellists, the Mexican peso (MXN) is recovering part of the ground lost in previous months. On 31 October, the peso traded at 13.30 per USD, which represents a 4.4% nominal appreciation over the 13.88 MXN per USD recorded at end of September. However, on 28 October, the peso had reached a peak by trading at 13.04 per USD, which marked the strongest level since mid-September. That said, on a year-to-date basis, the peso has accumulated a depreciation of 7.0%. The Central Bank recently expressed concerns about a ?highly depreciated and volatile? exchange rate and rising inflationary pressures. However, the Bank has so far refrained from intervening in the foreign exchange market, unlike other central banks in the region, such as Colombia and Brazil. That said, the continuation of the protracted European debt crisis is likely increase volatility in exchange markets in the months ahead.