Peso continues to rise in strength

Peso continues to rise in strength

Story link: Peso continues to rise in strength

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The Mexican peso was up by .43 percent in relation to the US dollar on Thursday in midday trading to 10.593 to the dollar in reaction to China’s move to revalue its currency.

The reaction has to do with China’s position as the number two exporter to the United States, a position it took over from Mexico in 2003.

One analyst said that Mexico will benefit from China’s revaluation, which added 2.1 percent to the value of its currency, due to Mexico’s high exposure to the US market - it sends 90 percent of its exports to the US - and its rivalry with China in that market.

The revaluation makes Chinese goods more expensive in the US and elsewhere and so makes goods from Mexico more attractive to the US market.

The peso has been rising in value recently on high interest rates and falling inflation rates, which have been spurring more foreign investment in long-term Mexican debt.

The peso has gained about 5.3 percent on the dollar so far this year.