The ongoing Global downturn along with the weak commodity prices took the MXN
to multi year low against US dollar. MXN depreciated to 18.80 per USD on January
21st 2016 and ultimately it is benefited to the Exports of the country. Despite
such currency weakness, Mexico is the favourite destination for the high yield
investments. Country is likely to take advantage from the underlying strength
present in the United States, as it the main hub for the
exports.
However, the Mexican peso is unlikely to influence from the
short term global financial market volatility. Above all, there are some
positive factors that will continue to support a relatively positive MXN
performance in long run. First is a favourable employment condition in the US
which indirectly leads to higher remittances flows and demand for Mexican goods.
The other factor is long-term interest rate differentials, which have reduced
the government's dependence on oil-related fiscal revenue and contributed to
inflation containment.