Two immediate results of Mexico's Presidential election on June 2nd were that the Mexican stock market took a dive (it has partially recovered since then) and the peso went down, and continues to go down, in value against the U.S. dollar.
Last night I photographed this image from my laptop. The chart shows the exchange rate for the last month, and you can see that the U.S. dollar went up against the peso immediately after the election.
For years the exchange rate hovered around 20 pesos to the dollar, but in the past year, the peso gained strength against the greenback. In April the exchange rate hit a low of around 16.5 pesos to the dollar. However, this week you get around two more pesos per dollar. I know two pesos does not sound like much, but if you were to exchange 1000 US dollars, you would get two thousand more pesos than before the election.
The Tuesday after the election, Alejandro was driving me back to the apartment. We were talking about the exchange rate. I said that I really did not need to go to the ATM that week, but, given the stronger dollar, I thought I would get some more pesos on Friday. Alejandro said, "Don't wait. Do it today." I did, and since then the dollar has continued to rise.
I am no economist, but it seems to me that the peso's decline will have two results. Goods imported from the U.S. will go up in price... not good for the Mexican consumer. However, Mexican businesses that export goods to the U.S. will get a boost since they can offer their products at a lower price in dollars.
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