Monday, March 16, 2009

Finally some good news?

The recent rally in world financial markets has indeed relieved some strains in several fronts. One of them is the Mexican peso appreciation.

Mexican peso has showed a remarkable positive path on the last four sessions gaining from it's record price, 15.60 pesos per dollar, 1.10 pesos to 14.50.

Mexican authorities put in motion a program of dollar auctions in order to re-gain confidence in Mexico's currency, it was rather difficult to attach the 50 per cent depreciation to the economy's health, reasons were to be found in the slump of capital flows into emergent economies -capital on-flows in 2009 are projected to reach only one third of 2008.

Another key factor of Mexican currency depreciation is the increase of the trade deficit attached to the fall of U.S.' imports. Mexican foreign trade is highly dependent of exports to be U.S.

This last factor will abide until power of purchase is re-gained in the north. Financial factors, however, are in dis-stress this week should prove as a big test in order to claim a frank recovery.

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