Sinking Value of Mexican Peso amidst Mixed Stocks and Earnings

Mexico may find yet one reason less to celebrate a fiesta. Last January 30, 2009, it was reported that the Mexican peso had sunk down on the news based on the United States economy shrinking down to the fastest ever pace. This was, according to most people, the most alarming bit of news they have ever heard in the past twenty seven years. Additionally, such news had indeed hit Mexico so bad that they are now bordering on poor status in terms of their already declining exports sector.

Weak Peso Seen as the Effect of Bigger Things

The peso of Mexico which is given the abbreviation of MXN had shown signs of weaknesses for the second straight day. It had lost around point seventy three percent and is now at fourteen point two ninety seven to a dollar. This was the result as the central bank came to a close at the last time. Earlier in the week, it had also traded for a short time at around fourteen point forty four per United States dollar. According to financial experts and analysts, looking into history would reveal that this is indeed the weakest level ever since the time that the new pesos had been introduced in the year 1993. Other news show that the stock index .MXX of the IPC had ended up closing down to point fourteen percent higher by around nineteen thousand, five hundred and sixty five point fourteen points. This happened quite surprisingly but predictably as the gains of the cellular operator company America Movil had been able to offset their losses quite satisfyingly, and that the Cemex which is the top cement supplier along with the bank Banorte showed some disappointing earnings where were results of the progress of the two companies.

More Worries and Anxieties in Mexico

Te Mexican Peso was indeed hit by a lot of worries and that Mexico was in fact being dragged deep into the recession thanks to the steep downturn that had happened in the United States, which is the destination of mainly around eight percent of the local exports. While there is a drop in the United States gross domestic product as shown by the fourth quarter earnings, it was actually not as bad as some analysts had feared because the data also showed some inventories of other unsold goods that were on the rise as well. Coupled with the plunging order of durable goods that were reported one Thursday in December, the Mexican efforts would most likely suffer some more. Francisco Suarez, the head of the analysis department at the brokerage Actinver in Mexico City, says that they have on their hands the perfect cocktail which they can use to produce some really terrible economic weaknesses.