Mexican peso hits rock bottom

Over the past week the value of Mexico’s currency has fallen precipitously. News on Friday of a continually weakening U.S. economy caused the peso to reach a record low of 14.4 against the U.S. dollar. "Each day we are hit with new surprises," one Mexican broker was quoted as saying; sadly, today was no exception:

Mexico's peso fell sharply on Monday, buffeted by more bad economic news in the United States where consumers cut spending for a sixth straight month.

The U.S. Commerce Department reported that consumer spending fell by 1 percent in December and that income dropped by 0.2 percent. Data for November were also revised lower.

The United States buys approximately 80 percent of Mexico's exports.

Mexico’s economy has been hurt by the global economic downturn, especially by the recession north of the border. Despite the economic problems, however, some analysts believe that a “healthy internal demand, fueled by credit growth, is key to Mexico weathering a global downturn in 2009.” We’ll have to wait and see if that's right.

Image- BBC News
Online Sources- IHT, Reuters