Jan 8, 2015

THE BACKSLIDING PESO

by D. Johnson

The dollar is remaining at an all time high against the peso. Since June of 2014, one greenback has consistently commanded 14.5+ pesos. Before that, the exchange rate had been holding pretty steady at around 12 to 1 since the recession of 2008; and prior to that rate, it was consistent at around 10 to 1 for nearly a decade.

Now, at nearly 15 pesos for 1 dollar, there is one question many are posing: Is 14.5+ the new stabilization point for the next few years or will the peso continue sliding towards the 20 mark?  According to economists and investors surveyed recently by Bloomberg, the peso will gain some of its mojo back against the dollar, but not much. These experts forecast the peso to be at 13.48 to 1 by the year’s end. That being said, there are some experts on the other side of the coin who predict the peso to slide even further to near 20 to 1.

Given the sometimes volatile nature of our world economies, only time can really tell what will happen with Mexico’s currency.

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