Mexican Peso Hits Record Low Despite Good 2Q GDP Numbers
- Mexican Peso hit a new record low against US Dollar (USDMXN record high of 16.8375)
- Mexico’s economy grew 0.5% in 2Q of 2015 and 2.2% from a year ago
- Sell off in emerging markets driving Mexican Peso and other EM currencies lower
The Mexican Peso hit a fresh record low against the US Dollar despite solid 2Q GDP figures released by the Mexican government Thursday. Mexico’s economy grew 0.5% in the previous quarter and 2.2% from the same period a year ago. The quarterly figure was stronger than the 0.4% pace expected, said Mexico’s Deputy Finance Minister Fernando Aportela. Meanwhile, the annual figure bested the 2.1% forecast and the Mexican government revised up its first quarter reading to 2.6%. In the five year weekly chart of MXNUSD below, the intensity and persistence of selling pressure behind the emerging market currency is clear.
In the daily chart below the intensity of the previous two days’ strong selling pressure is highlighted with the Rate of Change indicator.
Regardless of the good growth trends in the Peso is still under pressure due to the market’s shifting tastes for risk and yield High-return regions from developing (‘emerging’) regions have seen broad selling pressures as confidence for global growth has temperedand fear of volatility has risen. In the chart below, the Peso is overlayed with the MSCI’s Emerging Market ETF (EEM).
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