Dollar hits $18 pesos, its weakest level since March

WHAT HAPPENED

The dollar reached 18.02 pesos and closed near 17.97, its highest level since March. The peso has accumulated a decline of almost 2% in a week, while oil exceeds $106 per barrel.

WHY IT MATTERS

Expensive oil increases the fear that inflation will take longer to decrease. Additionally, Banxico cut its rate faster than the Federal Reserve, reducing the attractiveness of investing in pesos. This is felt first in imports, gasoline, travel, credit, and consumption.

AND FOR YOUR PORTFOLIO

For an investor in Mexico, a weak peso makes it more expensive for companies that buy supplies or goods in dollars and can reduce purchasing power. It also raises the cost of travel, tuition, and services charged in dollars; exporting companies may receive more pesos for their foreign sales.