Monday, September 12, 2011

U.S. Dollar surges against Peso

Over the past year the value of a dollar in Mexico has ranged from a high of about 12.5 pesos to a low of near 11 pesos. Today it surged, reaching a mid-day high of 13.04 pesos. At the close of markets the dollar fetched 12.8685 pesos, on average.
The upward movement is easy enough to decipher: continued investor worry over European sovereign debt issues and the future of the Euro, with renewed fear of a possible Greek bond default. We heard much about that back in May and June. Now the topic is resurfacing.
The numbers are actually a bit deceptive, as official exchange rates always are. If you were here in Mexico and went to a bank or money trader with U.S. dollars in hand, you'd be offered about 12.5 pesos per dollar, maybe slightly more (or less). But if you wanted to purchase dollars, you'd have to hand over about 13 pesos for each one. That's the way money trading always works. And if you're drawing U.S. funds via an ATM machine -- the way tens of thousands of Americans do every day -- you're at the mercy of your own institution in the States and whatever local bank you're dealing with here. You have no control over the actual exchange rate which will apply to your transaction. The same rule applies to purchases made in Mexico with a U.S. issued credit or debit card (although it's almost always cheaper to use a debit card).
In any case a 13 peso-to-dollar day is good news, if you're carrying greenbacks.

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