New Currency Crisis Dawns: Mexican Peso Plunges to Record Low Against the Dollar | Wolf Street

New Currency Crisis Dawns: Mexican Peso Plunges to Record Low Against the Dollar | Wolf Street

As the coronavirus crisis roils the global economy, the strengthening dollar is causing all manner of stress and mayhem for national economies and their respective currencies. Nowhere is this clearer than in Mexico, whose currency, the peso, never really recovered from the last crisis and is now collapsing all over again. As of 4 p.m. Monday (Mexican time), it had tumbled over 3% to a record low of 25.42 pesos to the U.S. dollar.

Even by historic standards, the sell-off has been relentless. In the past 16 days, the peso has experienced 16 record daily lows. Not since the height of the last peso crisis, five years ago, has the currency notched up so many new lows in one single month. During that crisis, which lasted from late 2014 to late 2016, the peso lost roughly a third of its value against the greenback, none of which it was able to claw back. During this new crisis, which has so far spanned no more than a month, the peso has lost 26% of its value. The chart shows the value of 1 peso, which has plunged from $0.054 on Feb. 22 to $0.039 today:

via New Currency Crisis Dawns: Mexican Peso Plunges to Record Low Against the Dollar | Wolf Street