Tensions are rising in Mexico’s model economy. Chief among them is the spectacular decline of Mexican peso, which has lost 8% percent of its value so far this year against the dollar, more than any other major currency. Since June 2014, it has shed 33% of its weight, now at 19.2 pesos to the U.S. dollar, the lowest ever.
Here is what the peso crash looks like, weekly, in terms of the value of one peso in US cents:
In many ways the peso is a victim of its own popularity. As the world’s most traded emerging market currency, the peso is prone to steep ups and downs. The market for the peso is so much deeper than for any other emerging market currency that many traders use it as a general proxy for risk. And risk is very much on the rise these days…
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