Peso’s value weakens further, hitting 24 to the dollar

The bad news continues for the Mexican peso, which fell to a record low of more than 24 to the United States dollar early Wednesday morning before recovering slightly.

According to financial data and media company Bloomberg, a single greenback was trading at 24.11 pesos at about 3:30 a.m. Wednesday. Just after 9:00 a.m. CT, the peso had recovered to 23.75 to the U.S. dollar.

In banks, the U.S. dollar was selling for 24.12 pesos on Wednesday morning, the newspaper El Financiero reported.

The dollar has also strengthened against many other currencies as companies and investors rush to free themselves of assets seen as risky, such as the peso, amid growing fears of a global recession due to the coronavirus pandemic.

The peso has now fallen about 30% compared to its best level this year, El Financiero said, adding that it is the worst performing among a basket of major currencies.

The slump on Wednesday followed a 5.4% decline in the value of the peso on Tuesday, according to data from the Bank of México. The peso closed trading at 23.16 to the U.S. dollar on Tuesday, which was also a record low at the time.

Financial experts are not ruling out the possibility of the peso falling to 25 to the dollar in the coming weeks, El Financiero said.

Mexican crude prices are also taking a hit due to the spread of coronavirus, growing pessimism over the impact the disease will have on the global economy and an oil price war between Saudi Arabia and Russia.

The per barrel price for Mexico’s export grade oil mix slumped 22.36% on Tuesday to US $18.78 as expectations grow that demand for petroleum will fall due to a coronavirus-fueled recession. The price is the lowest since March 2002.

The price for Mexico’s export mix had declined 66.5% this year as of Tuesday, El Financiero reported, while West Texas Intermediate and Brent Crude prices had both fallen more than 50%.

Source: El Financiero (sp) 

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