Peso vs. Dollar: A Currency Clash

This story was updated at 3:30 p.m. to show the value of the Mexican peso compared to the US dollar changed. On Tuesday afternoon, the Mexican peso became less valuable compared to the US dollar. This hasn’t happened since late April.

At 3:30 p.m. in Mexico City, one US dollar was worth 18.07 pesos. This is stronger than the peso has been since April 26. On Monday, the exchange rate was 17.67 pesos for one US dollar. So, the peso lost more than 2% of its value on Tuesday. Gabriela Siller, an expert from a Mexican bank, said the US dollar became stronger and the peso became weaker after some good news about job openings in the United States on Tuesday morning.

The US Labor Department said there were 9.61 million job openings in August, which is more than in July. This surprised economists, who had predicted 8.8 million job openings. Analysts thought this would make the peso lose value.

If the US raises interest rates, the US dollar becomes stronger compared to the peso. Right now, the Mexican interest rate is much higher than the US interest rate, which has been helping the peso. But the US might raise its rates soon. Cleveland Federal Reserve President Loretta Mester said she might raise interest rates again soon, and that made the US dollar stronger.

Also, US government bonds became more attractive because they offer higher interest rates, which made the peso lose value. The exchange rate between the US dollar and the Mexican peso has been changing a lot recently. In mid-September, one dollar was worth just above 17 pesos. Earlier in the month, it was 17.6 pesos for one dollar.

In the past week, the peso has lost about 60 centavos compared to the dollar, which is more than 3%.

Image Source:

About Author

Amar Shinde is a writer and researcher specializing in the intersection of culture, technology, and society. In their free time, they enjoy playing chess.