Peso in Mexico Is One of the Best Currency Performers in the World in February Patrick Gillespie - CNNMoney
go to original February 26, 2017

Maybe Mexico's "contingency plan" for President Trump is working out after all (CNN)

Mexico's currency, the peso, is one of the best performers in the world in February, up over 5%.

Before the U.S. election, the country's central bank started implementing what its governor, Agustin Carstens, called a "contingency plan." Carstens says Trump's potential policies would hit Mexico's economy like a "hurricane."

For ordinary Mexicans, the peso's momentum doesn't mean much. Gas prices rose as much as 20% in January while economic growth and wages continue to be sluggish. Life is getting more expensive.

Still, it's a swift turnaround for a country and currency facing an uncertain future with the U.S.

Since November, Mexico's central bank has raised interest rates three times and sold U.S. dollars to international investors. Among other efforts, it's all meant to buoy the peso that's been weighed down by Trump's threats.

"I think most people would tip their hat to Mr. Carstens," says Win Thin, head of emerging market currency strategy at Brown Brothers Harriman.

Trump's threats to potentially slap tariffs on Mexican imports and withdraw from NAFTA helped push the peso down to an all-time low in January. But by mid-January, the peso began gaining value again.

A few factors outside of Banxico's contingency plan have also contributed to the peso's recent rise.

Read the rest at CNN

Related: Losing Remittances Is Real Source of Mexico's Angst with Trump's Immigration Policy (Center for Immigration Studies)

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