*Updated May 31 - As May ends, U.S. dollar stages powerful rebound*Guadalajara -
Last year ended on a disappointing note for the dollar, which lost ground against the peso during most of the final quarter of 2012. On Dec. 31, the exchange rate was a little below 13 pesos. Dollar falls unexpectedly against Mexican peso as U.S. goes over fiscal cliff.
Those who spend dollars south of the border will long for those good old days, however. One hundred days into 2013, the peso continues its upward climb against the greenback. Yesterday it reached its highest level since August 2011, prompting a Mexican paper to comment this morning, el súper peso está de vuelta - "the super peso is back." Overall the 19 month high is good economic news for Mexico, although not such good news for its heavily U.S.-dependent tourist trade. A weak peso and strong dollar attract and promote the latter, by making everything here cheaper for visitors. A rising peso does just the opposite.
Banxico, Mexico's central bank, reported the dollar closed Friday at 12.195 pesos, decidedly lower than Thursday's close of 12.31. In 24 hours the peso appreciated 0.95% (12 centavos) against U.S. currency.
Banixco analysts attributed yesterday's surge to disappointing financial news from Washington. The U.S. economy added a mere 88,000 thousand jobs in March, far below what is needed for sustained and meaningful economic growth, and the unemployment rate dropped a negligible tenth of a percent, to 7.6. The peso was buoyed by those anemic stats.
In banks and currency trading centers those wanting to buy dollars paid a maximum of 12.4 pesos, and sellers, such as tourists, received as few as 11.75 pesos in return. The average exchange rate reported by one Mexican trading firm was a purchase price of 12.30 and a sale price of 11.80. Those numbers are about a peso per dollar below the Jan. 1 rates, when the dollar traded for 12.96 pesos.
It's been a good year so far for the Mexican moneda nacional. The peso has risen 5.7% against the dollar in 2013.
Luis Videgaray, Mexico's secretary of the Hacienda, a federal agency equivalent to the U.S. Internal Revenue Service and the Office of Management and Budget, emphasized yesterday that "the markets fix the exchange rate." He said his government would not interfere with cyclical forces other than to "moderate abrupt variations." Videgray said the PRI administration's focus is on economic expansion and development, not on bolstering the peso on world markets (Mexican peso "well anchored," says central bank director).
Apr. 8 - The dollar closed today at 12.15 pesos, the best showing by Mexico's currency since Aug. 5, 2011, when the exchange rate was 11.99 pesos. It could easily reach or fall below that mark this week. It's more good news for Mexico, but not for spenders of dollars here. A decision by Japan's central bank helped the peso today, and here is why: Peso cierra en mejor nivel en 20 meses.
Apr. 10 - The peso gained seven centavos on the dollar by mid-morning, to a new high (or low, for those holding American currency) of 12.08. In some Mexico City banks, those wanting to trade in their greenbacks were offered no more than 11.64 pesos.
May 8 - The dollar hit a 21 month low against the peso today, trading at 11.98 when markets closed.
Mar. 16 - Huge cost of consumer credit in Mexico is going up again
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Banxico chair Agustín Carstens says the peso's rise against the dollar demonstrates that Mexico's economy is solid. "It's not artificial, but is the result of adherence to fundamental macroeconomic principles."
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