The Mexican peso isn’t actually strong; Mexico has just been propping up its currency through interest rates.
Interest rates are currently 7%,double the U.S. rate. Down from 11.25% in 2023, meaning investors still borrow in dollars and invest in pesos to capture the gap. Problem is the economy has only grown around .5%.
The next Banxico meeting is in February, where rates are expected to be lowered again.
Considering Mexico’s economy is sluggish, it will likely need to cut rates to prioritize growth.
Secondly the U.S. has been aggressive toward Mexico's automotive sector, and it’ll likely come up in the July USMCA.
With 12 billion in Pemex debt maturing in 2026, the government's bailouts are driving the federal deficit to nearly 5% of GDP, threatening Mexico's credit rating. Mexico has no room for additional spending.
When you combine the with legal uncertainty from judicial reforms, the structural support for a "Super Peso" starts to look a facade.
Maybe @lbrglobal can correct me if wrong or chime in with more detail.
🚨Ha salido esta toma donde parece que Julián Álvarez NO la toca dos veces y que el Atlético tiene razón.
Mirad el vídeo completo, hasta el final, y decidme con objetividad.
Yo objetivamente creo que es gol.
https://t.co/yTwJGMChLL
Jaime Bayly y una descripción perfecta:
“La izquierda cuando llega el poder y antes de llegar al poder y después también, roba a escala industrial. Cuando la izquierda huele el poder y se instala en el hay que ver como roba”.
¡Así es, lo sabemos, es la verdad!