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Mexican peso plunges against the U.S. dollar

The currency falls to 15.47 per dollar, a new low, hurt by economic woes north of the border.

March 03, 2009|Tom Petruno

The Mexican peso plunged to new lows against the dollar Monday as global investors again rushed for the perceived safety of the greenback despite the horrid U.S. economy.

The peso was trading at 15.47 per dollar for large transactions between banks, compared with 15.15 on Friday and 14.5 two weeks ago. Retail buyers and sellers would be quoted different rates, but the trend is the same: more peso weakness.

The Mexican currency has collapsed from an exchange rate of 10 pesos to the dollar in August, and now is at its cheapest point since it was reconfigured in the early 1990s.

The crumbling U.S. economy has slammed Mexico's exports and dried up foreign demand for pesos. It also hurts that Mexican workers in the U.S. are sending less money home.

The peso's 33% plunge over the last six months is the worst performance among the world's major currencies, according to Bloomberg News data.

The Bank of Mexico has spent more than $18 billion of its foreign reserves since October in an attempt to halt the peso's slump, according to Bloomberg. The central bank bought $400 million more worth of pesos Monday.

For Americans who still have money to spend, the sinking peso should make traveling to Mexico more of a bargain. Ditto for the country's exports.

Mexico's stock market tumbled 4.7% on Monday. It is down 24% year to date, only a bit worse than the 22% drop in the U.S. Standard & Poor's 500 index.

Because of the peso's slide, however, the Mexican stock market in dollar terms is down 32% this year.

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tom.petruno@latimes.com

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