Peso Slide Deepens, as Investors Loss Keeps Piling

Aug 22, 2024 thejournalbiz

Traders trying to buy the dip in Mexico’s peso can’t catch a break.

Tweet on the Pesos slide

Peso Slide deepened more than 3% against the dollar this week and almost 14% in the past three months, by far the worst among peers.#currency #exchange #inflation pic.twitter.com/30OUiJsmfN

— The_Journalbiz (@the_journalbiz) August 22, 2024

Bloomberg chart

Local politics, the dismantling of so-called carry trades, and concerns about the US economic and political outlook are disrupting bullish calls on what was until May the best-performing emerging-market currency this year.

The peso is down more than 3% against the dollar this week and almost 14% in the past three months, by far the worst among peers. Its six-month implied volatility has jumped to near the highest in three years.

“The days of a stronger Mexican peso are behind us,” said Brad Bechtel, global head of FX at Jefferies Financial Group Inc. “Hard to play in it at the moment unless you get some tactical opportunities from time to time.”

It’s a stark reversal for the currency which until a few months ago was by far the best performer in emerging markets — one whose strength seemed so unshakable investors feared betting against.