‘Super peso’ surges, closes below 16.50 against US dollar

The “super peso” rose again on Friday, starting the day trading at 16.47 pesos to the US dollar and closing at 16.46, according to Reuters. This is reported to be its strongest rate since November 2015.

On Thursday, the peso traded briefly at its strongest rate against the dollar this year (16.50) before closing at 16.54.

Despite a strengthening dollar, the peso continues to defy predictions from even the sharpest of currency experts.

“Even Banxico’s rate cut [in March] failed to undermine optimism towards the currency, and the fiscal austerity measures imposed by the government have helped amid tensions with some business sectors,” Eduardo Ramos, senior market strategist for HFM Markets, told the news site Expansión.

In his Friday morning press conference, President Andrés Manuel López Obrador celebrated the peso’s strength, saying that this exchange rate is possible “because corruption has been eradicated and companies are confident about investing [in Mexico].”

The March jobs report released by the United States Department of Labor on Friday morning again confirmed that a strong dollar does not necessarily translate to a weaker peso.

According to analysts at Banco Base, the peso is expected to oscillate in a range of 16.41 to 16.67 per dollar in the short term. Meanwhile, the greenback has appreciated about 3.3% this year against a basket of major currencies, and foreign currency specialists polled by Reuters predict it will remain strong.

Presidential elections in Mexico and the United States in 2024, however, may create a more volatile environment for both currencies later in the year.

With reports from El Universal, Debate, Expansión and Reuters

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