The downward drive of the Mexican peso has been quite sharp during the past month, a rather surprising development considering the monetary unit's stronger performance thus far this year, Bloomberg reports.
Harming Latin America's most traded currency are concerns about the economic slowdown. While the monetary unit has surged 12 percent since late May, it has lost more than 2 percent to dubiously distinguish itself as the worst performing of 16 major currencies. The nation is forecast to grow 3.6 percent next year, the lowest growth rate since the recession began in 2009.
Peso weaknesses that have manifested as of late should not "detract from the bigger picture, which is an incredibly competitive currency, a very supportive monetary and fiscal backdrop, decent economic data with growth likely this year to be close to 4 percent and sound public finances," money manager Adrian Owens with GAM in London told the news source last week.
Mexico is set to install president-elect Enrique Pena Nieto, which is another factor dragging down the value of the peso.
The political challenge before leaders of the U.S. also is harmful to the peso, according to The Wall Street Journal. Mexico and the U.S. share a strong commerce relationship, thus the economic trouble in the U.S. is daunting for the peso.
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